delusionofgrandeur

The US Federal Reserve has today cut the base rate of lending by three quarters of a percentage point from 4.25% down to 3.5% amid fears of a major recession in the US economy.

The stock markets have been tanking since yesterday and it seemed that they were briefly buoyed by the news of Federal Reserve Chief Ben Bernanke’s interest rate cut but they may be slipping again as I type. I’m wondering if the situation with the Federal Reserve is rather like kicking a dead cat in a vain hope of making it bounce.

Update: Various commentators in the media have been suggesting that this cut is a sign of desperation and that if it proves ineffective, the Federal Reserve will have severely harmed it’s reputation.

This entry was posted on Tuesday, January 22nd, 2008 at 2:12 pm and is filed under Economy, News, Politics.You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.