The Federal Reserve announced Wednesday that it would start slowly reducing the trillions of dollars in bonds it bought to try to stimulate the economy, another milestone in the central bank’s effo…
The Federal Reserve announced Wednesday that it would start slowly reducing the trillions of dollars in bonds it bought to try to stimulate the economy, another milestone in the central bank’s efforts to return to a normal monetary policy after the Great Recession.
The long-awaited reduction in the Fed’s $4.5 trillion balance sheet comes amid great uncertainty at the central bank. There are several vacancies on the Fed board, and there could be a change in leadership early next year if President Donald Trump decides not to renominate Chair Janet Yellen.
On top of that, the devastation caused by recent severe hurricanes could make it difficult for Fed policymakers to get a solid read on the economy in the coming weeks as they decide whether to enact another small hike in a key interest rate.
The actions by Fed policymakers Wednesday demonstrated their confidence that the hurricanes will not cause long-term economic damage in the U. S.
As expected, central bank officials voted to hold the benchmark federal funds rate steady at between 1 percent and 1.25 percent.
Fed policymakers actually revised up their forecast for economic growth this year to 2.4 percent from a 2.2 percent projection in June.
Fed officials have been signaling for months that they planned to start reducing the Treasury bonds and mortgage-backed securities the central bank began buying in 2008 to try to stimulate growth by pushing down mortgage and other long-term interest rates.
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The Fed plans to gradually allow an increasing amount of proceeds from maturing securities to be run off the central bank’s books each month. As the bonds mature, the government pays the face value to the Fed. The Fed would keep some of the proceeds instead of reinvesting them in new bonds.
Yoplait yogurt is spoiling General Mills’ sales.
The Golden Valley-based packaged-foods company said Wednesday its U. S. yogurt sales fell 22 percent, pushing it to a ninth straight quarter of revenue declines.
Yoplait Light and Yoplait Greek 100 have suffered the most over the past year, as Americans shifted away from low-calorie diets in favor of more natural, wholesome ingredients.
General Mills shares fell 5.8 percent on Wednesday — for a 15 percent drop so far this year— as the company’s results for the quarter ended Aug. 27 were below Wall Street expectations.
General Mills’ overall retail sales in North American fell 5 percent in its recently ended fiscal first quarter. U. S. yogurt contributed more than half of that decline.
Global sales fell 3.5 percent to $3.77 billion. On a comparable basis, which excludes such factors as currency fluctuations, revenue dropped 4 percent, worse than the 1 percent to 2 percent decline the company has projected for the full fiscal year.
General Mills’ profit of $408.6 million was down 2.6 percent from the year-earlier quarter. Excluding one-time items, adjusted earnings per share came to 71 cents, below the FactSet consensus of 76 cents.
Travelers who check at least one bag when flying domestically are paying more overall than they did before airlines began unbundling fares in 2008 and charging separately for checked baggage, a government watchdog said Wednesday.
A report by the Government Accountability Office said airline officials told GAO investigators that base air fares are now lower than before airlines began separately charging passengers for checked bags, reservation changes, priority boarding and other services. But the GAO’s review of studies that have examined the effect of bag fees on ticket prices shows that charging separately for bags reduced fares by less than the new bag fee itself.
One study found that airlines with bag fees lowered fares to appear more competitive and then made up the lost revenue in bag fees. Another study found that declines in airfares amounted to less than the bag fee, so on average the combined total of the fare and bag fee increased.
United Parcel Service Co. said Wednesday that it plans to hire about 95,000 workers to handle the surge in packages from late November through January. That’s about the same number as the last two years.
Rival FedEx Corp. said earlier this week that it would hire about 50,000 people for the holiday season, the same as last year.
U. S. home sales fell 1.7 percent in August, pulled down by the effects of Hurricane Harvey and a worsening shortage of available properties.
The National Association of Realtors said Wednesday that sales of existing homes sank last month to a seasonally adjusted annual rate of 5.35 million.