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FED'S ACTIONS PAVE WAY FOR ECONOMIC RECOVERY

 FED'S ACTIONS PAVE WAY FOR ECONOMIC RECOVERY
 PHILADELPHIA, Feb. 28 /PRNewswire/ -- The Federal Reserve has


increased bank reserves and lowered interest rates sufficiently to revive long-dormant money growth.
 This is a necessary first step to foster an economic recovery, investment analysts at PNC Financial Corp (NYSE: PNC) said today.
 In their Investment Policy Statement for March, the investment analysts said they expect 1.4 percent growth in real gross domestic product (GDP) and an inflation rate of 3.1 percent this year.
 The Fed's actions, the investment analysts said, have had several positive effects on the economy -- stronger retail sales, increased demand for autos and additional gains in home building and buying. What's more, the Fed's move to lower reserve requirements should provide a further boost to the banking industry's profitability. "In fact," the investment analysts noted, "the recovery stage of the economic cycle has already been set in motion by the substantial improvement in bank liquidity, a typical occurrence during the current recessionary stage of the cycle.... The banking system is poised to provide liquidity for a budding economic recovery."
 The Investment Policy Statement said 1992 will be a constructive year for stocks but that the broad market indices will be misleading indicators of what is going on within the equity market. The average stock will continue to outperform market indices, as in 1991, with industrial issues outpacing consumer issues. "Stock selection remains a critical ingredient for investment success," the investment analysts said, adding that the potential for investors to exceed returns posted by the indices remains good.
 The PNC investment analysts also said long-term interest rates have risen too far, too fast, given the pace of the economy and the low inflation rate. "These rates are likely to recede to the midpoint of a 7.5 to 8 percent trading range within the next several months," they predicted.
 PNC Financial Corp, headquartered in Pittsburgh, is the nation's 15th-largest bank holding company, with assets of $44.9 billion. It operates approximately 500 community banking offices in Pennsylvania, Kentucky, Ohio, Indiana and Delaware and conducts business through additional offices in 16 states.
 PNC's principal banking affiliates include: Pittsburgh National Bank, Pittsburgh; Provident National Bank, Philadelphia; Citizens Fidelity Bank, Louisville, Ky.; Central Trust, Cincinnati; Bank of Delaware, Wilmington, Del.; Northeastern Bank, Scranton, Pa.; Marine Bank, Erie, Pa.; PNC National Bank, Wilmington, Del.; Hershey Bank, Hershey, Pa.; and The First Bank and Trust Company, Mechanicsburg, Pa.
 /delval/
 -0- 2/28/92
 /CONTACT: Linda Wolohan of Provident National Bank, 215-585-5516, or, 215-585-5453/
 (PNC) CO: PNC Financial Corp ST: Pennsylvania IN: FIN SU: ECO


JS-MK -- PH015 -- 3713 02/28/92 12:19 EST
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Publication:PR Newswire
Date:Feb 28, 1992
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