Azara Blog: Federal Reserve panics

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Date published: 2008/01/30

The BBC says:

The Federal Reserve has cut interest rates for the second time in nine days as it tries to keep the US economy from entering a recession. The central bank lowered rates to 3% from 3.5% after a two-day meeting. Last week, the Fed slashed the cost of borrowing by the largest amount in 25 years in a shock move to calm tumbling global stock markets. The Fed is hoping the cuts will cushion the US economy from the worst effects of the credit crunch and housing slump.

Panic. They don't have an easy job after the stupidity of the Greenspan years (allowing the housing market to go crazy), but a 1.25% reduction in a week does not seem very wise.

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