The Fed didn’t surprise anyone today, bowing to the market’s wishes for another .25% cut to the fed funds rate; bringing the benchmark lending rate to 4.5%.
From Market Watch:
While growth has been solid, “the pace of economic expansion will likely slow in the near-term, partly reflecting the intensification of the housing correction,” the Federal Open Market Committee said in a statement.
The rate cut, along with other moves by the Fed, “should help forestall some of the adverse effects on the broader economy” from the disruption of financial markets.
The FOMC said inflation risks remain. Core inflation readings have improved modestly, “but recent increases in energy and commodity prices, among other factors, may put renewed upward pressure on inflation,” the FOMC said.
The vote was 9-1, with Kansas City Fed President Thomas Hoenig voting to keep rates steady.
I would just like to thank Thomas Hoenig for having the courage to be the lone dissenter on the side of caution and prudence. I would also like to kiss the value of my American dollar good bye. I will have more later after I work longer and harder for less real wealth. Thanks Bernanke - really.
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