tsetsefly
12-16-08, 02:39 PM
Fed slashes key rate to near zero
Ben Bernanke & Co. cite weakness in economy and reduced inflation threat as justification for cutting rates below 1% for first time.
NEW YORK (CNNMoney.com) -- In its latest effort to try and stimulate the U.S. economy, the Federal Reserve cut its key interest rate to a range of between zero percent and 0.25%.
The central bank typically sets a specific target for its federal funds rate instead of a range. The rate had previously been at 1%. Most investors were expecting the Fed to cut rates to either 0.25% or 0.5%
In a statement, the Fed said the U.S. economy, which has officially been in a recession for a year, was in in danger of getting weaker, and that the risk of inflation had decreased "appreciably." Earlier Tuesday, the Labor Department reported that the Consumer Price Index (http://money.cnn.com/2008/12/16/news/economy/cpi/index.htm?postversion=2008121610), its key inflation measure, fell by a record 1.7% in November.
http://money.cnn.com/2008/12/16/news/economy/fed_decision/index.htm?postversion=2008121614
Reduced threat of inflation????
How long will they keep this rate is what I am wondering...
Ben Bernanke & Co. cite weakness in economy and reduced inflation threat as justification for cutting rates below 1% for first time.
NEW YORK (CNNMoney.com) -- In its latest effort to try and stimulate the U.S. economy, the Federal Reserve cut its key interest rate to a range of between zero percent and 0.25%.
The central bank typically sets a specific target for its federal funds rate instead of a range. The rate had previously been at 1%. Most investors were expecting the Fed to cut rates to either 0.25% or 0.5%
In a statement, the Fed said the U.S. economy, which has officially been in a recession for a year, was in in danger of getting weaker, and that the risk of inflation had decreased "appreciably." Earlier Tuesday, the Labor Department reported that the Consumer Price Index (http://money.cnn.com/2008/12/16/news/economy/cpi/index.htm?postversion=2008121610), its key inflation measure, fell by a record 1.7% in November.
http://money.cnn.com/2008/12/16/news/economy/fed_decision/index.htm?postversion=2008121614
Reduced threat of inflation????
How long will they keep this rate is what I am wondering...