By Michael Flaherty and Jason Lange WASHINGTON (Reuters) - The Federal Reserve on Wednesday upgraded its assessment of the U.S. economy, taking note of a decline in the jobless rate and signaling more comfort that inflation was moving up toward its target. Still, after a two-day meeting, Fed policymakers reiterated concerns about slack in the labor market and reaffirmed that it is in no rush to raise interest rates. "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." U.S. stocks turned modestly higher after the statement was released, while government bond prices extended earlier losses that had been spurred by a stronger-than-expected reading on economic growth.
By Lucia Mutikani WASHINGTON (Reuters) - 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. The second quarter's expansion was much stronger than the 3.0 percent economists had expected and bolstered the outlook for the remainder of the year.
By Jonathan Stempel NEW YORK (Reuters) - A federal judge on Wednesday ordered Bank of America Corp to pay $1.27 billion of damages after a federal jury found the second-largest U.S. bank liable for fraud over defective mortgages sold by its Countrywide unit. U.S. District Judge Jed Rakoff in Manhattan ruled nine months after jurors found Bank of America and former Countrywide executive Rebecca Mairone liable for defrauding government-controlled mortgage companies Fannie Mae and Freddie Mac through the sale of shoddy loans by the former Countrywide Financial Inc in 2007 and 2008. The case centered on a mortgage lending process known as "High Speed Swim Lane," "HSSL" or "Hustle," and which ended before Bank of America bought Countrywide in July 2008.