Posted on 12/15/2008 9:46:18 AM PST by BGHater
With the country spiraling deeper into recession, the Federal Reserve is ready to slash its key interest rate – perhaps to an all-time low– in hopes of cushioning some of the economic fallout felt by many struggling Americans.
To battle the worst financial crisis since the 1930s, Fed Chairman Ben Bernanke and his colleagues already have ratcheted down their main lever for influencing the economy – the federal funds rate – to 1 percent, a level seen only once before in the last half-century.
The Fed opens a two-day meeting Monday to assess to economy and decide its next move on rates. Another reduction to the funds rate, the interest banks charge each other on overnight loans, is all but certain to be announced Tuesday.
Many economists predict the Fed will cut its rate in half – to just 0.50 percent. A few think the Fed could opt for an even more forceful action – lowering rates by a whopping three-quarters percentage point or more. If that larger cut occurs, it would be the lowest on records that track the monthly average of the targeted funds rate going back to 1954.
Even an aggressive rate reduction won't turn the economy around, analysts said.
"It is not so much going to give the economy a big push forward. It's more a case of trying to help the economy from being pushed further backward by all these negative events," said Stuart Hoffman, chief economist at PNC Financial Services Group.
(Excerpt) Read more at 3.signonsandiego.com ...
If this isn’t going to help the economy, why do it?
Seems it doesn’t make much difference. With the credit markets still tight, it’s like pushing on a string.
Great. So in 8 years we will have yet another bubble fueled by socialistically low interest rates. Anyone have any guesses on what it will be next time?
Even more annoying, Obama will ride the upswing of the bubble, but in 8 years people will want a Republican again. Then the bubble will burst and they’ll talk about how the Obama economy was so much better.
So, when are the damn banks going to pass down some of these lower rates to consumers? Just take a look at your credit card rates.
Soon they will be paying people to take loans...lol
Well, this oughta FINALLY fix everything.
/sarcasm
It’s FREE MONEY!!!
Take the money and invest in Llama yarn futures! You can’t go wrong!
No, this won’t cause a spike in Llama wool prices. It cannot result in a future bust in Llama wool production, with Llamas dying for lack of food.
A Llama in every pot, I say!
Print the money, Ben!!!! Let no asset bubble go uninflated!!!
Not just credit cards. We just refi’d last month to get out of an ARM (kinda funny—we didn’t need a bailout to do it!) and LIBOR rates are still up at 6%. At this point, I think a lot of banks don’t give a damn what the feds do.
I can has negative interest rate?
I think we are off to see the wizard, the wonderful wizard of Oz.
The Fed is outside its power region of 2-5%. Nothing they do can have any effect at this point.
I currently have a mortgage at 6.2 and I would love to refy but I have not seen the rates much bellow what I have now.
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