Federal Reserve officials downgraded their assessment of the U.S. economy’s performance Wednesday, but gave no indication they intend to take new steps to boost growth and jobs.
After a meeting of the Fed’s decision-making body, officials said they’re sticking with plans to end the purchase of $600 billion U.S. Treasurys as planned on June 30 and would keep short-term interest rates near zero for at least several more months.
The recovery is continuing at a moderate pace, though “somewhat more slowly” than previously expected, officials said in a statement following the Federal Open Market Committee meeting, echoing remarks made by Fed Chairman Ben Bernanke in a speech earlier this month. Officials also said job market indicators have been weaker than anticipated compared to when they last met in April.
n updated forecasts released after the meeting, Fed officials lowered their growth forecasts and predicted core inflation would remain higher than previously thought. The economy is now expected to expand at a rate of around 2.7% to 2.9% this year and 3.3% to 3.7% in 2012. That is below estimates given after the last meeting in April for growth of 3.1% to 3.3% in 2011 and 3.5% to 4.2% next year.The 2011 projection for underlying inflation—stripping out volatile food and energy costs—was raised to between 1.5% and 1.8% from April’s forecast of 1.3% to 1.6%, with core prices expected to ease to 1.4% to 2.0% next year instead of 1.3% to 1.8%. The unemployment rate is expected to decline to 8.6% to 8.9% in 2011 and 7.8% to 8.2% next year, versus previous expectations for a drop to 8.4% to 8.7% and then 7.6% to 7.9% in 2012.
FedEx Corp. reported a 33% jump in quarterly profit Wednesday and described recent economic weakness as temporary, forecasting fiscal 2012 earnings above Wall Street’s expectations.
The world’s largest air-cargo carrier, considered a bellwether for global trade, expects a continued “moderate” pace of recovery and industrial-sector expansion.
“The near-term [economic] softness will be temporary,” Chief Executive Fred Smith told analysts on a conference call Wednesday after the company reported its profit gain for the fiscal fourth quarter ended May 31. “Going forward, we see stronger economic growth,” he said.
Mr. Smith said issues such as rising oil prices, poor weather and Japan’s nuclear disaster have curbed the pace of recovery in recent months, but now are subsiding as constraints on growth.
Germany, France and the Netherlands have begun talks with banks and insurers on getting private investors to participate in a Greek rescue.
A meeting between German Finance Ministry officials and representatives of companies including Deutsche Bank AG (DBK) was set for this afternoon in Frankfurt, said people with knowledge of the matter who declined to be identified. A French official said details of a Greek debt rollover package will be completed by a July 3 meeting of European finance ministers.
Apple Inc. (AAPL) plans to introduce a new iPhone in September that boasts a stronger chip for processing data and a more advanced camera, according to two people familiar with the product.
The device will include the A5 processor, the more powerful chip that Apple added to the iPad 2 earlier this year, along with an 8-megapixel camera, up from the 5-megapixel model in the iPhone 4, said the people, who asked not to be identified because the details aren’t public. Apple is also testing a new version of the iPad that has a higher resolution screen, similar to the one now used in the iPhone 4, one of the people said.
Below is a table showing the current P/E ratios of the ten S&P 500 sectors. We also provide what the average P/E ratio has been for each sector since the start of 2007. As shown, the Financial sector’s current P/E is the farthest below its average P/E ratio since ’07 at -6.27. Technology’s current P/E ratio is also quite a bit lower than its average P/E. Only three sectors currently have P/E ratios that are higher than their average levels over the last four and a half years — Industrials, Energy, and Telecom.
Bonus: Miss USA contestants are asked about Evolution