RBI says it will take action against banks for not providing the information required to assess a mortgage application article RBI Governor Raghuram Rajan today said it will review the role of banks in mortgage applications if the information is not provided.The RBI has asked banks to provide the information needed to assess whether a mortgage has been granted or declined within a certain time fra...
The Federal Reserve said on Wednesday that it would not tighten interest rates in the coming months as it pushes for an inflationary boost, but will try to make it easier to buy homes in a way that would reduce the risk of a recession.
The central bank said in its statement that it is “ready to engage in discussions with the Fed on ways to accelerate asset price inflation”.
It said that the Fed has agreed to provide an extension to its policy to allow it to make further adjustments to its $4.5 trillion policy-setting cycle.
The US economy grew by an annualised rate of 1.6 per cent in the first quarter, the lowest in the past decade, but the economy is expected to shrink by 2.2 per cent this year.
The Federal Housing Finance Agency expects unemployment to rise to 8.1 per cent by the end of this year, which is above the central bank’s forecasts.
“It is likely that the economy will be less robust in the months ahead, as the Fed will seek to slow the pace of price growth,” the Fed said.
The Fed also raised its target for the unemployment rate to 6.5 per cent, down from 6.8 per cent.
It has been widely expected that the central part of the Fed’s asset purchases programme will be extended beyond the March 31 end of the current mandate.
It will also be able to borrow more to help prop up the economy, and is now spending more to do so.
The latest move is part of a series of steps taken by the Fed to stimulate the economy after a period of low growth.
The main objective of the policy is to stimulate demand and support the US recovery, and it has been accompanied by a massive expansion of mortgage-backed securities, which can be sold at attractive prices.
The moves are likely to help the US economy in the short term.
But it will also add to the risk that the US could be in for a prolonged downturn if interest rates remain low, and the Fed remains hesitant to tighten its monetary policy.
The policy has boosted the value of mortgage securities to a record high and also brought down the price of houses.
The median price of a typical house rose by 8.4 per cent last year.