Daily News 3/25/2015

March 25, 2015

Wednesday – March 25

Government sponsored agency Fannie Mae released its March 2015 Economic and Housing Outlook this week. The report revealed that economic growth took a hit in the first quarter of 2015 due to the West Coast port strike along with severe weather in parts of the country. However, economic activity should pick up in the second quarter due to an upbeat labor market and positive consumer and business fundamentals. Fannie Mae expects Gross Domestic Product to hit 2.8% this year. In addition, with the pickup in the economy, the housing sector, which was somewhat a drag in the first quarter, should also gain momentum as the rest of the year unfolds. Fannie expects the housing sector in 2015 to be above the 2014 levels.

A big corporate merger was announced today as Heinz is buying Kraft Foods in what will become the world’s 5th largest food and beverage company. Kraft’s products include brands such as Jell-O, Maxwell House Coffee, Planters Peanuts and its famous Macaroni & Cheese. Heinz is known for ketchup along with Lea & Perrins and Ore-Ida. The deal will be partly financed by private equity firm 3G Capital and Warren Buffet’s Berkshire Hathaway. Annual revenues are expected to be about $28 billion.

The debate of whether or not the U.S. Federal Reserve should raise interest rates or not this year continued today. The president of the Federal Reserve Bank of Chicago, Charles Evans, said today overly weak inflation and a lack of evidence suggesting price pressures are about to heat up, meaning the Fed shouldn’t raise interest rates this year. “I think economic conditions are likely to evolve in a way such that it will be appropriate to hold off on raising short-term rates until 2016,” Mr. Evans said.