Fed expected to lead round of rate cuts

[OhioChick]

Source: guardian.co.uk

Monday October 27 2008

The US Federal Reserve is expected to cut interest rates again this week amid mounting speculation of a new round of coordinated international action to halt the panic that has swept the world's financial markets.

The need for further moves has been underlined by fresh signs of strain in the global banking system and the wider economy. On Friday stockmarkets around the world nosedived and the pound crashed as investors reacted to the worst fall in UK economic output for almost 20 years. Figures from the US this week are expected to show the US economy contracted by about 0.5% in the third quarter.

"The incoming data are likely to confirm that the economy has entered deep recession and that deflation is now a serious threat," Capital Economics said in a weekly research note. JP Morgan economist Bruce Kasman warned that the signs were pointing increasingly "to a deep and synchronised global recession".

The Federal Reserve is expected to cut rates by half a percentage point, taking US rates down to 1%. Nick Parsons, head of markets strategy at nabCapital in London, said yesterday he expected the Bank of England monetary policy committee to follow the Fed's move with a one-point cut from the current 4.5%. He said the MPC had not made a full one-point cut since the Bank of England was made independent in 1997, but added: "Unprecedented times call for unprecedented action."





Read more: http://www.guardian.co.uk/business/2008/oct/27/interest...

[Skittles]

1. it won't help

[marmar]

2. More lipstick for the economic pig.....

n/t

[whistle]

3. In other words hyperinflation that will close down the U.S. economy

...and wipe out the middle class in America

[Javaman]

4. My first thought as well. nt

[metapunditedgy]

5. Oil/energy prices coming down; they're probably banking on that

to limit inflation. Of course, the Fed has recently argued that energy prices should not be included in their "core" measure of inflation, since nobody pays for gasoline anyway. :-|

[whistle]

6. What do you mean that "nobody pays for gasoline anyway"?

[Hassin Bin Sober]

13. Sarcasm.

[msongs]

7. just another way to screw people who work hard and SAVE their money - lower interest rates nt

[Patriought]

8. Trickle down economics

I wonder just how far down we will have to go before these yahoos realize that the only way to save the economy will be to start from the bottom up, not the top down.

Given the thirty or so years since Reagan, I'm guessing pretty damn far.

[jwirr]

9. Why don't they make them retroactive? That way those of us so

far in debt could benefit!

[Skink]

10. Fed to donate 700 billion to opec.

All the fed members are heavily invested in Dubai.

[Psephos]

11. We "donate" a billion a day to OPEC and other oil suppliers already

That's a thumbnail tally of how much the US pays each day, 24/7/365, for oil imports.

[pam4water]

12. How about they just give me a few trillion? I'll fix everything.