News of the Federal Reserve cutting its interest rate is not unusual, especially during these times that the nation is in dire crisis. In the past several months, the Fed already made such moves, cutting its interest rates to unprecedented levels to ease the impact of the crisis by bringing back the confidence of the financial investors and spur consumer spending.

But what is shocking is the news that the Fed is prepared to cut the rates by 0.5%! This is an all-time low. No other central bank in any country has done this – cutting the federal fund rate at such level – before and even at present. The Fed’s recent action shows the seriousness of the situation. However, economists believe the Fed’s plan is a psychological move. An economist commented, “It’s a feel-good thing.”

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Posted by Jones on December 16th, 2008 :: Filed under $$$ CRISIS
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