Interest Rates

With interest rates at near-record lows, these have not been good times for investors looking to generate low-risk income. Money-market accounts are paying an average of 0.5%. (Think about that: A $1-million deposit into an average money-market will yield a whopping $5,000 a year.) Even five-year CDs are yielding just 1.5% on average. So, where's an income-hungry investor to turn? One option is high-yield bonds, which are paying about 6% but carry risk that issuing companies may default, eroding the bonds' value.

WASHINGTON - Federal Reserve policymakers in their last meeting voted almost unanimously for a new bond-buying program to boost growth, but they were far from unified in terms of how much good they thought the new stimulus would do for the real economy. Fed members also considered adopting more changes in their communication strategy to give the public greater clarity about the their decision-making on interest rates, according to minutes of their last monetary policy meeting, released Thursday with the usual three-week lag. Officials at the central bank generally agreed last month that without further monetary stimulus, "economic growth might not be strong enough to generate sustained improvement in labor market conditions," the minutes said.

There are no people on Earth as romantic as the French. No one is punctual like the Swiss. The Germans have defined a sense of order. The Italians know how to eat. And no one, I mean no one, does misery like the Irish. Ireland's well-chronicled story of rags to riches to rags again is a cautionary tale of the early 21st century. A country reared on hardship, famine and oppression has, after a brief turn in the economic sun, been cast back into the misty gloom of struggle. But lately I've begun to notice that a mischievous quality has sneaked in under the cloak of misery the Irish have put back on with disarming ease after the good times ended.

In a landmark step to protect consumers from predatory vehicle loans, Gov. Jerry Brown signed into law two bills regulating specialized used-car dealers known as Buy Here Pay Here lots. For the first time, the dealers that offer their own in-house financing and target people with damaged credit and low incomes will be required to provide warranties on every car they sell in California. The new laws also oblige Buy Here Pay Here dealers to post fair-market values on their autos while giving customers greater flexibility in making payments.

WASHINGTON — With 30-year mortgage rates hitting new lows and recent borrowers' payment performance the best by far in decades, you'd think that banks and other lenders might be loosening up on their hyper-strict underwriting standards. But new national data from inside the industry suggest this is not happening. In fact, in some key areas, standards appear to be tightening even further, and the time needed to close a loan is getting longer. The average FICO credit score on new loans closed in August was 750, 9 points higher than it was one year earlier, according to Ellie Mae Inc., a Pleasanton, Calif., mortgage technology firm whose software is used by many lenders.

NEW YORK -- The United States' credit rating and status as the world's reserve country would be threatened if the federal government doesn't resolve the "fiscal cliff" before automatic spending cuts and tax hikes kick in at the end of the year, Goldman Sachs Chief Executive Lloyd Blankfein said Monday. Though Blankfein said he was optimistic that political leaders would reach a short-term deal after the November election and perhaps reach a compromise by the middle of next year, a solution was far from certain.

The Federal Reserve's latest effort to improve the economy is drawing plenty of criticism from conservatives and "sound money" advocates, who warn about the potential for more inflation and asset bubbles. The critics have a point: The Fed's attempts to keep interest rates low far into the future pose real risks and costs, especially to retirees living off their savings. But in the face of stubbornly high unemployment, and with Congress doing so little, we welcome the Fed using what few tools it has to try to promote economic growth.

U.S. interest rates are at rock-bottom levels, but that's not helping most Americans with mortgages. And those high-cost loans remain a big drag on the economy, experts say. Roughly 69% of American homeowners with mortgages at the end of the second quarter had rates of 5% or higher and about 33% of them had rates above 6%, according to detailed mortgage data provided to The Times by Santa Ana research firm CoreLogic. Meanwhile, the average 30-year fixed-rate mortgage has been below 4% every week but one this year, and the average 15-year fixed-rate mortgage, popular among buyers looking to refinance, has been below 3% since the last week in May, according to Freddie Mac. Several factors may be keeping homeowners from securing lower mortgage rates, economists said, including battered credit, insufficient income, stricter lending standards and the costs of refinancing.

The Federal Reserve announced big new steps last week to further push down mortgage interest rates and spur housing. But the vast majority of Americans with mortgages have rates higher than those rock-bottom ones already being offered by the big lenders, indicating that many people are unable to take advantage of the historic drops in loan costs when it could be helping them the most. Several factors may be keeping homeowners from securing lower mortgage rates, economists said, including battered credit, insufficient income, stricter lending standards and the cost of refinancing.

WASHINGTON -- Federal Reserve Chairman Ben S. Bernanke said "grave concern" about the nation's high unemployment rate led the central bank to launch another round of stimulus, and that the aggressive open-ended program underscores a commitment to the economic recovery. "We've seen not enough jobs growth to bring down the unemployment rate, and what we need to see is more progress," Bernanke said. The Fed would continue with its stimulus "until we do," he said. "We're just trying to get the economy moving in the right direction, so we don't stagnate at high levels of unemployment," Bernanke said Thursday at his quarterly news conference, which followed the Fed's announcement of its new stimulus effort.