An inflation gauge tied to the GDP report showed prices rose at 2.6 rate in the fourth quarter, down from a 3.7 percent pace in the third quarter.
However, when food and energy prices are excluded, “core” inflation – which the Fed watches closely – rose at a 2.2 percent rate in the fourth quarter, a pickup from the 1.4 percent growth rate in the third quarter. That suggests inflation is filtering into a variety of other prices.
To fend off inflation, the Federal Reserve is expected to boost interest rates next Tuesday one-quarter percentage point to 4.50 percent. It will be last meeting for Alan Greenspan, who will retire that day after more than 18 years running the central bank.
Kalau di Australia, harga rumah/apartemen terus turun, tahun kemarin temen gue beli 280k sekarang tinggal 260k.
Kalau beli pada saat di bottom…., namanya Wei-Ji.
Beli Ayam Panggang GKIS & IBA!!!
Beli IIF sedang akan menanjak!!
Bernanke Sees Economy Growing in 2006
Wednesday February 15, 6:11 pm ET
By Martin Crutsinger, AP Economics Writer
Ben Bernanke Says Federal Reserve Is Ready to Boost Interest Rates if Needed to Combat Inflation
WASHINGTON (AP) – New Federal Reserve Chairman Ben Bernanke said Wednesday the economy is on track for good growth this year, sticking closely to predecessor Alan Greenspan''s script with one big difference: His comments were much easier to understand.
In his debut congressional testimony as Fed chairman, Bernanke signaled that the central bank, which has raised interest rates 14 times since June 2004, stood ready to boost rates more if needed to combat inflation.
Investors and private economists, who had been apprehensive that Bernanke might sound a tougher line on inflation than Greenspan, said they detected no switch in policy from the Greenspan Fed.
“There were no big surprises. Bernanke kept very much to the promise he made at his confirmation hearing that he would maintain continuity with Greenspan” said David Jones, chief economist DMJ Advisors, a private forecasting firm in Denver.
Wall Street took Bernanke''s testimony in stride with stocks ending the day up slightly. The Dow Jones industrial average rose 30.58 points to close at 11,058.97 after rising 136 points Tuesday.
A respected economics professor at Princeton before entering government service as a Fed governor in 2002, Bernanke demonstrated during more than three hours of grilling from the House Financial Services Committee that he was up to the task of answering questions without upsetting financial markets.
Several committee members in fact complimented Bernanke for his straightforward answers, a contrast to Greenspan, who mastered the art of using complex sentences to dodge questions he did not want to answer.
“I can see you are a former teacher,” said Rep. Carolyn Maloney, D-N.Y. “You are very clear in your responses.”
But while Bernanke was more direct, he skillfully avoided being led into areas where he did not want to state an opinion. Democrats tried several ways to get Bernanke, who served last year as Bush''s chief economist, to criticize the president''s drive to make the tax cuts permanent at a time of high budget deficits.
At one point, when pressed for an opinion on raising the minimum wage, he apologized, saying, “I am going to be an economist and give you the one hand, the other hand” response.
Dressed in a conservative gray suit, Bernanke sat alone at the witness table, often scribbling notes on the questions, as he was pushed to talk about a variety of issues from soaring budget and trade deficits to what should be done about growing gap between the wealthy and the poor.
He acknowledged that widening income inequality was a problem, but he said it had been occurring for a quarter-century and as did Greenspan, he said the best way to deal with the problem was through education and job retraining.
The only time Bernanke seemed uncomfortable was when he was asked for his reaction to speeches Greenspan has made, reportedly for large amounts of money, to an audience in Tokyo and a New York investment house.
“According to government ethics rules … it is permissible for a retired (Fed) governor to speak in public about the economy so long as he or she does not divulge confidential information,” Bernanke said. “I have no indication that he has violated that rule.”
The Jan. 31 Fed meeting was the last presided over by Greenspan, who stepped down that day after 18 1/2 years as Fed chairman to be succeeded the next day by Bernanke.
Private economists predicted the central bank will raise its target for the federal funds rate, the interest that banks charge each other, by another quarter point to 4.75 percent at Bernanke''s first meeting on March 27-28.
They said a final hike that would push the funds rate to 5 percent could occur at the following meeting on April 10.
Bernanke said future rate hikes would depend on incoming economic data. But he said despite last year''s surge in energy prices and the devastation from the Gulf Coast hurricanes, recent information showing strong employment growth and retail sales in January “suggests that the economic expansion remains on track.”
“With respect to the general conduct of monetary policy, Bernanke revealed himself as a clone of Alan Greenspan,” said Brian Bethune, chief U.S. economist for Global Insight, who predicted two more quarter-point rate hikes before the Fed moves to the sidelines.
Naiknya suku bunga tentu bukan berita yg bagus buat dunia usaha –> bursa saham, semakin tinggi suku bunga berarti semakin tinggi juga bunga pinjaman yg harus ditanggung pengusaha, di sisi lain, bunga yg tinggi akan meng-encourage orang untung menabung dan tidak berbelanja - yg mana juga sesuatu yg buruk untuk dunia usaha. apakah ini awal dari memburuknya situasi bagi dunia usaha?
ECB Hikes Key Interest Rate to 2.5 Percent
Thursday March 2, 8:46 am ET
By Matt Moore, AP Business Writer
European Central Bank Raises Key Interest Rate to 2.5 Percent Amid Concern About Inflation
FRANKFURT, Germany (AP) – The European Central Bank raised its key interest rate by a quarter percentage point to 2.5 percent on Thursday amid worries about inflation.
The increase in the refinancing rate was the second quarter-point hike in four months by the bank after it held steady for more than two years.
All 54 economists surveyed by Dow Jones Newswires had forecast that the bank would increase the rate, following a similar move in December.
Financial markets and economists will now be looking for details from ECB President Jean-Claude Trichet about what factors the bank is still watching and for any hints about another increase later this year. Some believe the ECB will take it slow, given that signals about growth in the 12 nations that share the euro as their currency remain mixed.
Twelve of the surveyed economists expected the rate to be at 2.5 percent by year''s end, 18 said 2.75 percent and 18 said 3.0 percent.
Recent figures raised concern, with gross domestic product in Germany – the euro zone''s largest economy – stalling in the final three months of 2005 and the country''s unemployment above 12 percent in January and February.
In the euro-zone, GDP grew just 0.3 percent in the final quarter of 2005, compared with 0.6 percent in the previous quarter.
On Wednesday, the European Union reported that inflation in the euro zone was 2.3 percent in February compared with a year ago, down from 2.4 percent the previous month. The Eurostat statistics agency did not explain the reasons for the drop.
The ECB''s guideline for inflation is less than, but close to, 2 percent.
January''s jump in inflation from 2.2 percent in December was the first rise since the price index spiked at 2.6 percent in September amid pressure from oil supplies.
Eurostat said the January increases were also fueled by high energy costs, particularly fuel for transport and gas used for heating.
Trichet told European lawmakers last week that, despite the mixed data, the euro zone''s economy was moving forward.
“Our assessment continues to reflect a progressive strengthening of economic activity, supported in particular, by stronger investment, which should be followed by a gradual strengthening of consumption growth,” he told the European Union''s Economic and Monetary Affairs Committee.
He said the fourth-quarter results were nothing more than a hiccup of “short-term volatility,” adding that “the conditions remain in place for continued sustained economic expansion.”