Fed’s Outlook Reflects Weaker Data
The Fed this week extended Operation Twist through the end of year in light of weaker domestic and global growth conditions.
The leading economic index release this week pointed toward a more modest growth environment in the months ahead.
Housing market statistics this week showed that the market continues to slowly improve with housing starts up slightly over the past two months. While existing home sales slipped slightly for the month, they remain above year-ago levels.
Slowing Signs Detected in Swiss Economy
Despite the recession in the Eurozone, the Swiss economy has held up remarkably well. However, there are signs that economic weakness in the Eurozone is exerting headwinds on Switzerland.
Because Switzerland is experiencing mild deflation at present, the central bank is running a very accommodative stance including a floor on the francs-per-euro exchange rate. Asset price bubbles could eventually surface if policy accommodation remains in force indefinitely.