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It’s not the economy, stupid.
It’s the credit crunch.
The size of the Federal Reserve’s expected interest rate cut this afternoon may help stimulate a sluggish economy. But like the several cuts before, it is unlikely to unfreeze the credit markets, especially the mortgage one.
The Federal Open Market Committee decided today to lower its target for the federal funds rate 75 basis points to 2-1/4 percent.
Recent information indicates that the outlook for economic activity has weakened further. Growth in consumer spending has slowed and labor markets have softened. Financial markets remain under considerable stress, and the tightening of credit conditions and the deepening of the housing contraction are likely to weigh on economic growth over the next few quarters.
Originally posted by marg6043
I knew that, we have a market that is now hook to low interest rates every month, and bail outs from the fed every week.
Does that surprise me that the markets will fall again? no.