When Ben Bernanke spoke in May after a regular two-day meeting of the Federal Reserve’s top policy makers, financial markets went crazy. Stocks plunged and interest rates rose when he suggested that the Fed would consider tapering purchases on long-term government bonds “in the next few meetings.” No big change in policy is expected this time when the Federal Reserve wraps up its two-day meeting today.
But investors will go through every word of the post-meeting statement for any clues about when tapering might happen. Bernanke has been saying the Fed expects to start winding down the bond-buying program later this year if the economy is strong enough to start reducing unemployment. The central bank has said it intends to keep short-term rates near zero until U.S. unemployment reaches 6.5 percent. The rate is now 7.6 percent.
The eurozone’s unemployment rate has dropped for the first time in nearly two and a half years, suggesting the recession might be over. Eurostat, the EU’s official statistics office, says the jobless rate in 27 nations has fallen to 10.9 percent.
Ford soon will offer a natural-gas version of its F-150 pickup truck, the most popular vehicle in America. The company is the first U.S. automaker with that option in a light-duty pickup truck. Ford, General Motors and Chrysler already have natural gas-powered, heavy-duty trucks. The trucks will have factory-installed valves, pistons and rings to handle natural gas and gasoline. The option will cost $315. But buyers will have to pay a factory-approved installer to put in new fuel tanks, lines and injectors. That will cost $7,500 to $9,500.
The cost of the Deepwater Horizon oil spill in the Gulf of Mexico has been enormous for the giant energy company BP. The company has disclosed that its $20 billion fund to cover damage payments has been nearly exhausted. Mounting costs might take a further bite out of future profits. While the fund still has $7 billion left, all but $300 million has been earmarked for spending. Since the spill in 2010, the British company has taken more than $42 billion to pay for the cost of a staggering cleanup, plus fines and compensation. BP asked a federal judge to freeze future compensation payments. The company has vowed to fight vigorously against “false” and “absurd” claims made by companies that did not suffer real losses from the spill.
The first of the fall travel sales have just been posted by the airlines. Prices for many routes will drop sharply before the end of the summer. “Prices tend to drop right around this magical date of August 27th about 33 percent,” says Rick Seaney of the website FareCompare. The weather will still be warm in most places, while airports, hotels and resorts will be less crowded. “For my money it is the absolute best time of the year right after the school gets back in session September October and early November.”
Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesabc