The Fed does the expected, sort of

I don’t think anybody was expecting the new federal funds rate target to be a range, but everybody was expecting a rate cut, and we got one, from an already-low 1% to a new-record-low 0 – 0.25%.  I also don’t think anybody is expecting it to turn the economy around, considering the failure of already-low short-term rates to do that, but Wall Street’s broad stock indexes were up 5% for the day.   My guess is the traders see the move as a sign the Fed is still doing all it can and then some.

fed funds chart 2008 dec 16

All the way down

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One Response to “The Fed does the expected, sort of”

  1. democommie Says:

    Ranjit:

    Nice blog. Since I have the economics acumen of the homeless I will struggle to keep up, but I’ll be hangin’ out here from time to time. Oh, btw, it would appear that a number of the geniuses that are in charge of the economy have about the same degree of sophistication in that regard.

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