90 seconds at 9am: Fed holds at 0.25%; Greece sorted?

Watch on our video page here Watch on YouTube here David Chaston details the key news overnight in 90 seconds at 9am in association with the BNZ, including The US Fed has held its official rate target at 0.25%, but it was not unanimous, with a key member dissenting again. He warned of the risks of low rates over an extended period, saying this could be causing imbalances and a tougher policy response in the future. In Europe, S&P has backed away from downgrading Greek debt after Euro Zone ministers moved to adopt a bailout framework – taking the immediate sting out of the Greek crisis – but possibly raising the stakes when other countries come under budget deficit pressures.. In fact, EU officials have warned the UK that it wants to see faster cuts in the British deficit – and they say it matters not that the UK is not in the eurozone – the Brits need to do this because they are in the EU and have signed up to Brussels policy. Apparently, EU officials don’t believe the optimistic British forecasts, and say the planned deficit reductions are just not good enough. From the US there is a growing awareness that the huge amount of high-risk and high-yield corporate debt taken on in the 2006 and 2007 period will come due in 2012 – as much as $700 billion of that 5-7 year debt – and along with the massive government debt that will also have to be raised in that same year, $2 trillion for the US alone, there are real fears that the overload will mean widespread defaults for those corporates. Moodys is now saying this avalanche of debt raising will be a critical issue if governments and companies don’t get out in front of it.