U.S. wholesale inventories rose 0.8% month-over-month
in May, marginally above expectations for a 0.7% advance, while the
previous month’s figure was revised to a 1.4% gain from a previously
reported 1.3% rise, according to a report released Friday by the
Department of Commerce.
U.S. pending home sales resumed their decline in May,
falling 4.7% in the month after an upwardly revised 7.1% bounce in April,
according to the National Association of Realtors. April’s rebound was
originally reported as a 6.3% gain.
Shares of Freddie Mac and Fannie Mae
were looking a little better in early trading on Tuesday after investors
fled the two government sponsored entities (GSEs) the previous day over
doubts that their underlying capital could make it more
difficult for them to buy or guarantee mortgages. That, in turn, could
make interest rates on new home mortgage loans rise sharply.
The 4.7% decline in U.S. pending home sales in May shows that the
previous month’s gain was not a true sign of
stabilization, economists said after a release the National
Association of Realtors on Tuesday.
Inflation has become the number one concern among
small business owners, according to the National
Federation of Independent Business Index of Small Business Optimism
released on Tuesday.
Richmond Fed President Jeffrey Lacker (non-voter)
said economic growth should pick up next year and that withdrawing the
fiscal stimulus as growth risks fade makes “eminent sense”.
U.S. Treasury Secretary Henry Paulson said he is
pleased Freddie Mac and Fannie Mae are committed to raising more
capital this spring, calling reform of the government-sponsored
enterprises the best way to combat foreclosures.
IndyMac has announced that, effective yesterday, it
is closing both its wholesale and retail production channel and will no
longer accept any new mortgage loan submission or rate locks. It will
also reduce its workforce to around 3,200 from the
current level of 7,400. The bank will also, apparently, continue its
other retail banking operations.
Federal Reserve Chairman en Bernanke said the Federal Reserve may
extend Wall Street’s access to lending until 2009.
High-profile speakers will take centre stage on Tuesday. Federal
Reserve Chairman Ben Bernanke is set to speak in
Arlington, Virginia at the Federal Deposit Insurance Corporation’s
Mortgage Lending for Low- and Moderate Income Households forum.
Richmond Fed President Jeffrey Lacker is also slated to speak to the
National Economists Club in Washington, D.C. on the U.S. economic
outlook.