US Stock Market Slow to Rebound

Even though there is the risk of unemployment, payment cut-offs and decline in the money value which is shaking the financial system currently, there is still a ray of optimism for the Federal Reserve that US economy can still recover in the later 2009. According to latest news sources federal reserves says that they are less concerned about the current situation as the pace of economic contraction is slowing down and deflation no longer remains as a serious danger. There is improvement and stabilization in the aspects like fall in housing market, household spending and financial confusion which had affected the market condition and financial stability of the US economy. A certain degree of progress is visible in the financial market recently as the pace of economic slump is getting slow down. Since the financial stress is still continuing it may continue week for some time.

It also seems that the rigid credit situations, crash in asset price and increased aversion risk can continue heavily and can put forth burden for the US economy. According to the latest news credit crisis has led to the closure of four banks in Georgia, Minnesota and California by the regulators. The closure has resulted in this year’s national tally to become 44. FDIC has stated that it will soon mail a check to insured depositors of Community Bank of west Georgia. Recently, 19 banks in the country were subjected to stress test and it is found that 10 out of 19 need to raise the capital for combating with the current circumstances. As banking giants like Bank of America, Wells Fargo, Citigroup etc were also included in the test they can help in returning the government funds by raising the capital.

The country is slowly restoring the financial stability under the administration of Barack Obama. The government is hoping that the economy will remain stable and there will be improvement in the immense economic growth contraction of 6.1% seen early this year. The economic situation can improve a lot under this government in the near future. Even though there is slight improvement in job losses in May which was about 345000 compared to January this year which was about 741,000, there is possibility for rise in unemployment in the coming months. It is expected that rise in unemployment will be by 9.6%in the coming months. Though there is a gradual economic progress, a certain degree of uncertainty exists because of the tight credit conditions prevailing today.