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Greenspan hints at higher rates

Mr Greenspan wants sustainable economic growth Federal Reserve chairman Alan Greenspan has said the US economy is continuing to grow in 2005, and hinted that the Fed would continue to raise rates.

He told the US Congress that the economy “seems to be on a reasonably firm footing, while underlying inflation remains contained”.

But he warned that rapidly-rising house prices, linked to speculation, could add to inflationary pressures.

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Seems as though it is the topic of the week…

Hawaii posts second-highest home prices in the country
By Allison Schaefers

Hawaii had the second-priciest homes in the country in 2003, after California, according to a nationwide housing survey released yesterday by the U.S. Census Bureau.

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US rates upped on inflation fears

Fears of increasing inflationary pressures prompted the US central bank to raise rates at its 3 May meeting.

The Federal Open Market Committee (FOMC) opted to take action amid concern over rising prices, minutes of the meeting show.

But while there had been an “upcreep” in short term inflation it remained worried about slowing economic growth.

As a result, the FOMC opted to maintain its “measured pace” of rates rises, increasing rates by 0.25% to 3.0%.

The increase was the eighth time the Fed, led by Alan Greenspan, has raised rates since June.

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Sales of Existing Homes Hit Record as Prices Soar

By JENNIFER BAYOT
Published: May 24, 2005

Sales of existing homes swelled 4.5 percent to a record in April, and prices climbed at the fastest rate in almost 25 years, the National Association of Realtors reported today, defying predictions of a slowdown and adding to some analysts’ concerns that the market is overheating.

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