Fed Evaluating Radical Economic Programs

By JEANNINE AVERSA, AP Economics Writer Jeannine Aversa, Ap Economics Writer –

WASHINGTON – With signs the economy is improving but still fragile, Federal Reserve policymakers are considering whether some programs intended to drive down rates on mortgages and other consumer debt should be slowed down.

Most economists predict that Fed Chairman Ben Bernanke and his colleagues, who resumed meeting Wednesday morning, won't launch any bold new efforts at the end of their two-day gathering.

Fears have grown on Wall Street that the Fed's radical efforts to lift the country out of the longest recession since World War II could ignite inflation later on.

"Injecting additional money into the banking system is a pretty dangerous game right now, and the Fed cannot afford to press on the accelerator amid a potentially inflationary environment," said Richard Yamarone, economist at Argus Research.

Wanting to snuff out any rise in inflation expectations, the Fed could opt to tweak its already-announced programs to slow down purchases of either government debt or mortgage-backed securities. Doing so also could help avert possible market disruptions and make it easier for the Fed to reel in these programs once the economy rebounds.

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Balance Chasing. The Economic Crisis Continues.

CBS News...balance chasing

Are you experiencing "balance chasing" with your credit cards?

There won't be any changes regarding the fine print on your credit card agreements until 2010. Will this be too late? Now that the banks and credit card companies are aware of the changes that will be made, won't they be taking advantage of the money they can swindle out of their customers now?

"Under the new rules, which take effect July, 2010, customers who are less than 30 days late on payments would not be subject to higher interest rates and their credit ratings won't take a hit, personal finance expert and author Jordan Goodman told CBS' The Early Show.

There will be no retroactive interest charged to previously paid bills; late payments on one card will not affect interest rates on another; and companies would be required to improve readability of monthly statements...

The changes mark the most sweeping clampdown on the credit card industry in decades and are aimed at protecting consumers from arbitrary hikes in interest rates or inadequate time provided to pay the bills." -- CBS News

If these rules come with consumer protection clauses or laws for the time between now and 2010, they will be a good thing. Without consumer protection, these laws may be cause for credit catastrophy during this current economic crisis.