With Wreckage Piling Up, Fed Eyes Another Rate Cut!

With Wreckage Piling Up, Fed Eyes Another Rate Cut!

news.yahoo.com

WASHINGTON – As the economic wreckage piles dangerously higher, the Federal Reserve is prepared to ratchet down interest rates — perhaps to their lowest point in more than four years — with the hope of relieving some of the pain felt by many Americans.

The convergence of a housing collapse and a lockup in lending has created the worst financial crisis in more than a half-century. Alan Greenspan, who ran the Fed for 18 1/2 years, called it a "once-in-a century credit tsunami," and conceded that he made mistakes that may have aggravated the economy's slump. With a recession seen as inevitable, if not already under way, any Fed rate cut would be aimed at cushioning the fallout.

Vanishing jobs and shrinking paychecks have forced consumers to cut back sharply. Millions of ordinary Americans have watched their 401(k)s and other nest eggs shrink and the value of their homes drop, making them feel in even worse financial shape. In turn, businesses have cut back on hiring and other investments as customers hunker down and credit problems make it harder and more costly to get financing.

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[edit on 26-10-2008 by DimensionalDetective]

This giant racketeering scheme which is called the fed just never ceases to amaze. They keep tossing trillions of increasingly worthless capital to all of the rich fraud profiteer criminals, keep the printing presses printing out trillions more to MAINTAIN the bad debts and fraud practices, and repeatedly keep dropping interest rates, which just turns the inflationary table upside down on its head.

But like a train that is speeding for a giant brick wall, we all just watch in stunned horror, as the engineer pours on the extra speed as he gets closer to impact.

Unfortunately, we're all trapped aboard as his passengers...

Sigh

Investors and some economists predict the central bank will drop the rate by half a percentage point to 1 percent. If that happens, it would mark the lowest rate since the summer of 2004. Others, however, think the rate will be cut by a smaller, quarter-point to 1.25 percent.

news.yahoo.com
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