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Feds fear Inflation, Credit Crunch, and the Value of the Dollar, hope to battle Consumer Confidence.

By
Real Estate Broker/Owner with Carlos R. Arvizu Sr. with Prudential California Realy

Inflation concerns with respect to Crude Oil and other related by products, such as chemicals, and other related products, as well as the value of the Dollar against other currencies, have Federal Reserve causious in making substancial cuts in the fed funds rate.  The Federal Reserve is very Concerned that inflation is a major threat to the economy, but continue to lower rates amid inflation and credit concerns that is affecting Wall Street and as well as many Mortgage Originals.  Increased productivity is often credited for economic growth with little signs of inflation.

The Gross Domistic Product is a good sign that the overall economy  has sustainable groth, however,  Consumers show signs of diminish Consumer Confidence.

Productivity is the rate at which goods or services are produced.  It is most commonly defined in terms of labor, which is the contribution of people to the process.  Labor costs represent about two thirds of the value of the output produced.  The Bureau of Labor Statistics of the US Department of Labor releases the most widely cited productivity statistics quarterly and annually. 

Productivity is significant in that as it increases, businesses can produce more with the same or less input.  This wealth building effect is vital to the US economy.  As productivity increases, the US economy generally performs better.  As productivity decreases, the economy generally suffers.

While the bond market generally favors signs of weakness in the economy, bonds tolerate growth as long as the economic environment shows little or no inflationary pressures.  Fortunately, inflation has remained in check as of late.

Keep in mind that rates remain historically very favorable.  Now is a great time to avoid the uncertainty surrounding continued market volatility. 

Capitalizing on the opportunities of the current level of media hype with respect to foreclosures, short sales and bank REO properties can be a windfall in future wealth building?  When what is perceived as a door closing, is another one opening.

Carlos R. Arvizu Sr

562-755-3856

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