Browse content similar to 01/01/2016. Check below for episodes and series from the same categories and more!
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He said's decision today reflects our confidence in the US economy -- | :00:30. | :00:40. | |
The Fed's. The chairwoman of the Federal Reserve has steered the bank | :00:41. | :00:45. | |
into a new era. The first rate hype cycle since 2004 has begun. Her | :00:46. | :00:51. | |
predecessor was responsible for US monetary policy during the darkest | :00:52. | :00:55. | |
days of the financial crisis. A challenge, to navigate the recovery. | :00:56. | :01:02. | |
During this programme, we ask if America is ready for rising rate. | :01:03. | :01:10. | |
The financial crisis of the late 2000 was centred on American banks, | :01:11. | :01:15. | |
and can perhaps be traced back to a key moment. The Leeman Brothers, the | :01:16. | :01:24. | |
fourth largest investment bank, has gone bankrupt. It has been a day of | :01:25. | :01:33. | |
turmoil after the collapse of Lehman Brothers. The collapse caused | :01:34. | :01:38. | |
calamity and the Federal Reserve spent seven years putting the pieces | :01:39. | :01:43. | |
together. Returning to normal was always the hope, and in 2015 to | :01:44. | :01:48. | |
Central Bank took action. Be economic recovery has clearly come a | :01:49. | :01:52. | |
long way, although it is not yet complete. Room for further | :01:53. | :01:56. | |
improvement in the Labour market remains, and inflation continues to | :01:57. | :02:02. | |
run below our long-run objective. But with the economy performing | :02:03. | :02:09. | |
well, and expectation to continue to do so, a modest rise in the federal | :02:10. | :02:19. | |
funds rate is appropriate. It was based on falling unemployment and | :02:20. | :02:25. | |
inflation rising. If you keep interest rates down for too long, | :02:26. | :02:30. | |
the pressure will continue to build up and we will continue a pressure | :02:31. | :02:34. | |
in inflation. That could cause interest rates to rise more sharply | :02:35. | :02:40. | |
in the future. If the Fed wants to raise interest rates in a gradual | :02:41. | :02:44. | |
fashion, it must start sooner rather than later. Rates were kept low to | :02:45. | :02:49. | |
stimulate the economy, and it worked. Houses are being built once | :02:50. | :02:59. | |
again. The talk today is not of foreclosure, but prices potentially | :03:00. | :03:04. | |
getting of themselves. During the downturn, this firm had to close ten | :03:05. | :03:07. | |
branches and lay off thousands of workers. Now, for the first time its | :03:08. | :03:12. | |
turnover is back to pre-crash levels. Our employees took a big pay | :03:13. | :03:19. | |
cut and I went without salary for three years. But we were determined | :03:20. | :03:27. | |
to get through it, and we did. America's car industry also made it | :03:28. | :03:32. | |
through. Here in New Jersey, the talk is no longer of downsizing and | :03:33. | :03:37. | |
sales crashing, but of expansion and profitability. Dealerships like this | :03:38. | :03:44. | |
one are once again buzzing. The economy is coming back in | :03:45. | :03:48. | |
stabilising. That fear factor isn't there. Consequently, people are | :03:49. | :03:56. | |
getting what they want and enjoying life. With interest rates higher, | :03:57. | :04:01. | |
everything from car loans to mortgages will be a bit more | :04:02. | :04:04. | |
expensive. Does that make a difference to you? It does, but I | :04:05. | :04:11. | |
will make it work. You are always trying to find a good deal. It makes | :04:12. | :04:16. | |
this man's job a bit harder. As inventory manager, he must | :04:17. | :04:20. | |
anticipate what the customer wants before they walk in the door. The | :04:21. | :04:26. | |
prices can be quite different depending on features. The interest | :04:27. | :04:35. | |
rate change can push your price from $299, and that makes a big | :04:36. | :04:39. | |
difference. So, people may not pay the extra money? That's right. | :04:40. | :04:44. | |
People come in with a set price in mind. Even with high interest rates, | :04:45. | :04:52. | |
2016 is expected to be a bumpy year. The Fed 's move was widely | :04:53. | :04:56. | |
publicised. Many banks had already taken steps to price the increase | :04:57. | :05:02. | |
into some loans and saving rates. For borrowers, whether it's car | :05:03. | :05:06. | |
loans or home loans, it perhaps means there is not too much to fear. | :05:07. | :05:11. | |
But it is not much of a reason for savers to smile. And even more | :05:12. | :05:15. | |
reason to be unhappy for American exporters. The rush is on to fill | :05:16. | :05:24. | |
holiday orders. This masks a deep concern, whether America's | :05:25. | :05:30. | |
manufacturing revival will continue. Here, they make awards, notebooks | :05:31. | :05:34. | |
and other products. One third of them are sold in countries around | :05:35. | :05:38. | |
the world, including come at a. In Canada, we have lost around $125,000 | :05:39. | :05:47. | |
in revenue this year. Simply because the department can no longer afford | :05:48. | :05:55. | |
our parts at these costs. This allows us to separate oxygen from | :05:56. | :06:00. | |
the air. Imagine how hard it is to sell big-ticket items. This exporter | :06:01. | :06:04. | |
only sells a handful of these machines each year. The sharp rise | :06:05. | :06:12. | |
of the US dollar in 2015, combined with the rate hike, is holding it | :06:13. | :06:16. | |
back. The strength of the dollar is very significant for us in terms of | :06:17. | :06:19. | |
our competition. It translates to anyone that was manufacturing in | :06:20. | :06:25. | |
Europe, would have about a 30% cost advantage. This economist doesn't | :06:26. | :06:32. | |
see much light at the end of the tunnel for US exporter 's. That's | :06:33. | :06:38. | |
where the Achilles heel of the US economy is. Manufacturing, it is the | :06:39. | :06:51. | |
most vulnerable area. Rates were kept low to help the millions of | :06:52. | :07:00. | |
Americans looking for work. But it also brought a lot of cheer to Wall | :07:01. | :07:05. | |
Street. It's a strange monster, for the Feds to be at zero. Along. It | :07:06. | :07:10. | |
means that money was free to borrow for bank to bank. -- from. Much of | :07:11. | :07:19. | |
that free money flowed into equity markets, making a decision to raise | :07:20. | :07:23. | |
rates one of the most closely watched events in year 's. The | :07:24. | :07:28. | |
Federal Reserve raising interest rates for the first time in nearly a | :07:29. | :07:32. | |
decade. It is sending Wall Street soaring. Some traders were relieved | :07:33. | :07:40. | |
with the certainty a rate hike delivered. It was wonderful. It | :07:41. | :07:46. | |
meant that everyone who has been on the sidelines, everyone who has been | :07:47. | :07:53. | |
cautious, everybody with big expectations, everybody who needed | :07:54. | :08:00. | |
some closure on this rise, it needed it to be closed. Given the bumpy | :08:01. | :08:04. | |
ride this year, the committee was clear. They didn't intend to take | :08:05. | :08:10. | |
the risk of moving too fast. Janet Yellen has made it clear her goal is | :08:11. | :08:14. | |
to have a long expansion. They have to allow markets to adjust. There | :08:15. | :08:19. | |
are always unintended consequences, because you are using tools in a | :08:20. | :08:23. | |
magnitude they have not been used in before. They are worried about the | :08:24. | :08:27. | |
unintended consequences. How will markets react? So, the error of free | :08:28. | :08:40. | |
money is over. To erase cheap credit without damaging the economy, rates | :08:41. | :08:46. | |
will continue to rise, but gradually -- era. It is a validation of the US | :08:47. | :08:53. | |
economy's return to some kind of strength. The challenge now for | :08:54. | :08:59. | |
Janet Yellen and her colleagues is to manage the risks and deliver a | :09:00. | :09:01. | |
complete recovery. A huge fire has engulfed part | :09:02. | :09:12. | |
of a luxury Dubai hotel, near where people had gathered to watch a | :09:13. | :09:15. | |
New Year's Eve fireworks display. The blaze started on the 20th floor, | :09:16. | :09:18. | |
and within minutes there was | :09:19. | :09:21. |