Filed under: Major movement, Indices, Market matters, Economic data, Federal Reserve
The Federal Open Market Committee (FOMC) reduced the target Federal Funds Rate and the Discount Rate by 0.25%. The quarter-point cut in the Fed Funds Rate was predicted, although many (myself included) expected the Fed to be much more aggressive in cutting the discount rate, reducing or possibly eliminating the discount window penalty.
The FOMC deleted the reference to a balance between inflation and economic deterioration, although it mentioned that inflationary pressures were still a concern. However, the language describing the recent economic turmoil was relatively restrained.
The Fed gave no assurance that it considers the economic deterioration more serious than inflation, stating that it “will act as needed to foster price stability and sustainable economic growth.” It also gave no indications of its course for the future, saying “Today’s action, combined with the policy actions taken earlier, should help promote moderate growth over time.”
Continue reading The Fed’s decision: Not quite as expected!
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