Independence Day for the Fed and Toyota says a fix is coming soon
The Fed chairman was confirmed by the Senate for a second go-round as el jefe of the central bank Thursday, but by the narrowest margin in history.
It seems odd to say that a 70-30 vote in favor of Bernanke qualifies as tepid support, yet that’s the way it works in Washington.
So what happens next for the Fed? If the economy is really on the road to recovery — and Friday’s strong GDP report suggests that this is the case — then Bernanke is going to have to shift from crisis management to the more mundane, but equally important, task of managing interest rates.
It’s no secret that with the central bank’s key federal funds rate remaining near zero percent, the next move by the Fed will be to raise rates. But when will it start and how aggressive will it be? Let the debate begin.
The Fed is supposed to be above politics. [Read the full article]
A Toyota spokesman has said that the carmaker is very close to announcing a solution to the issue for cars here in the U.S.
Toyota still needs to get regulatory approval for a proposed repair in the U.S. and in Europe before a fix can be made.
The recall is to correct a problem that could cause the gas pedal, as it ages and becomes worn, to stick partway down under certain circumstances. Toyota recalled 2.3 million vehicles in the U.S. for this problem this week, although no repair procedure had yet been put in place.
The European recall involves eight different models, several of them not sold here. The precise number of vehicles involved in that recall is still under investigation but it could be as many as 1.8 million, Toyota said in a statement.
The gas pedal recall is separate from an earlier one, begun in November to fix a problem in which the gas pedal can become caught on the edge of the removable floormat. [Read the full article]
Stocks tumbled Friday, with the tech-heavy Nasdaq leading the way down, as investors bet that the strong economic growth seen in the fourth quarter of last year can’t be sustained.
The Dow Jones industrial average (INDU) lost 53 points, or 0.5%. The S&P 500 index (SPX) lost 11 points, or 1%. The Nasdaq composite (COMP) fell 31 points, or 1.5%. The Dow and S&P 500 closed at the lowest point since Dec. 6 of last year and the Nasdaq at the lowest point since Nov. 30.
Technology and commodity shares led the declines for the second session in a row, following Thursday’s big selloff.
"I think some of this is an indictment of what we’re seeing in the economy," said Don DeWaay, CEO at DeWaay Capital Management. [Read the full article]
Treasurys rose Friday, recovering from earlier losses, as ongoing concerns about the global economy overshadowed a stronger-than-expected report on U.S. gross domestic product.
What prices are doing: The benchmark 10-year note was up 5/32 to 97-30/32, pushing the yield down to 3.62% from 3.66% late Thursday. Prices and yields move in opposite directions.
The 30-year bond gained 16/32 to 97-18/32 and its yield was 4.52%. The 2-year ticked up 1/32 to to 99-31/32 and yielded 0.85%.
What’s moving the market: Treasurys fell in early trading after the U.S. government said GDP, the broadest measure of the economy, grew at a 5.7% annual rate in the fourth quarter.
The report was better than expected. Economists surveyed by Briefing.com thought GDP would grow at a 4.7% annual rate after it grew at a 2.2% rate in the previous quarter. [Read the full article]