The Federal Reserve on Wednesday reaffirmed it was in no rush to raise interest rates, even as it upgraded its assessment of the U.S. economy and expressed some comfort that inflation was moving up toward its target. After a two-day meeting, Fed policymakers took note of both faster economic growth and a decline in the unemployment rate, but expressed concern about remaining slack in the labor market. "Labor market conditions improved, with the unemployment rate declining further," the Fed said in a statement. "However, a range of labor market indicators suggests that there remains significant underutilization of labor resources."
The U.S. economy rebounded sharply in the second quarter as consumers stepped up spending and businesses restocked, putting it on course to close out the year on solid footing. Gross domestic product expanded at a 4.0 percent annual rate after shrinking at a revised 2.1 percent pace in the first quarter, the Commerce Department said on Wednesday.
A federal judge on Wednesday ordered Bank of America Corp (BAC.N) to pay a $1.27 billion penalty for fraud over shoddy mortgages sold by the former Countrywide Financial Corp. U.S. District Judge Jed Rakoff in Manhattan ruled after a jury last October found the second-largest U.S. bank liable for the sale by Countrywide of defective loans to government-controlled mortgage companies Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) Rakoff also ordered former mid-level Countrywide executive Rebecca Mairone, who was also found liable and was the only individual charged, to pay $1 million, citing her "leading role" in the fraud and calling some of her testimony "implausible." While the bank's penalty was below the $2.1 billion sought by the U.S. Department of Justice, it marks another legal defeat for Bank of America over its disastrous July 2008 purchase of Countrywide, which has cost tens of billions of dollars in litigation, loan buybacks and writedowns.