Concerns Relating To The Recovery

(Reuters) - Federal Reserve Chairman Ben Bernanke on Tuesday warned Congress that putting off a decision on the fate of expiring Bush administration tax cuts could unsettle businesses and households, undercutting the U.S. economic recovery. With presidential and congressional elections looming in November, many analysts think Congress is unlikely to act until the final months of the year. The tax cuts expire on January 1. Bernanke told the Senate Budget Committee that lawmakers might not have the luxury of waiting. "I don't know exactly when the uncertainty would become a factor, but surely as we get closer to January 1 and Congress has not given a clear road map for how it plans to proceed, that would certainly affect planning, business decisions, household decisions, as they look ...

The Weekly Bottom Line HIGHLIGHTS OF THE WEEK United States Fed Chairman Bernanke delivered a much-anticipated speech at the economic symposium in Jackson Hole. The three main messages were that: first, addressing the structural issues that are impeding a stronger economic recovery in the U.S. - the housing market and long-term unemployment - are outside the realm of the Fed, Second, the U.S. does need to address its long term fiscal difficulties, and; Third, doing so should not prevent policymakers from providing more near-term fiscal stimulus. Canada Currently, most forecasters have pushed the timetable for an interest rate hike by the Bank of Canada by almost a full year. What's more, there are market murmurings that the central bank could cut rates in the ...

U.S. Review Headline Real GDP Comes in Weaker than Expected * Real GDP grew at a 3.2 percent annual pace in the fourth quarter, which was weaker than expected. The increase in output, however, pushed the level of GDP to $13.38 trillion slightly surpassing the peak of $13.36 trillion reached in late 2007. The disappointing headline figure was lowered by a significant pullback in inventories, which carved an eye-popping 3.7 percentage points off real GDP. Real final sales jumped 7.1 percent. * Consumer confidence rose 7.3 points in January to 60.6, the fourth increase in five months and the highest level since May 2010. Global Review Big Miss on Q4 GDP Raises Doubts about U.K. Recovery * Following four consecutive quarters of expansion, the U.K. economy contracted at a 2.0 ...

The Week Ahead Highlights * Risk sentiment and markets stabilizing; rebound potential * Spanish downgrade latest threat to EUR * Easing of tensions bodes well for the EUR * EUR/GBP still sitting above key support (N.B.: Monday May 31 is a holiday in the UK and US. Market liquidity is likely to be lower and volatility may be higher as a consequence.) Risk sentiment and markets stabilizing; rebound potential Global stock markets appeared to stabilize in the past week on signs that the recent sell-off was extreme and that the global recovery was continuing. The MSCI World index managed to rebound slightly after falling to new lows for the decline, generating a sizeable 'hammer' pattern on weekly candlestick charts, a potential bullish reversal indicator. The S&P 500 also ...