AMERICAN equities made solid gains yesterday, before ending the day slightly lower, after US consumer confidence data painted a picture of a strong recovery in the world’s largest economy.
Fresh data from the Conference Board revealed a third consecutive month of gains in its consumer confidence data in January. The index rose to 55.9 in January, the highest reading since September 2008 and up from an upwardly revised 53.6 in December.
But as if any further reminder was needed about the fragility of the recovery, the closely watched Standard & Poor’s/Case-Shiller indices showed that house prices fell in November.
Meanwhile, Federal Reserve policymakers are considering adopting a new benchmark interest rate. This would replace the one that they have used for the last 20 years.
Officials have said they may replace or supplement the Fed funds rate with interest paid on excess bank reserves. Their first monetary policy decision of 2010 will take place today, and any policy change will be closely watched.