David Kirkpatrick

January 29, 2009

Interest rate remains a floating point below 0.25%

Filed under: Business, Politics — Tags: , , , — David Kirkpatrick @ 5:44 pm

I still think this “floating point” business is one of the crazier things to come out of the ongoing financial crisis and the Fed’s shatter-shot approach to fixing things.

From the link:

Despite all of the new programs the Federal Reserve has created in the past 18 months to deal with the financial crisis, there is one thing even Chairman Ben Bernanke was unable to overcome: the number zero.

The Federal Open Market Committee ended its two-day meeting Wednesday deciding to leave the nation’s interest rate unchanged at the range of 0% to 0.25%, saying the economy remains “weakened” and did not expect any economic recovery to occur until later this year.

However, the bank announced in its statement that it would consider purchase more assets or buying longer-dated securities – possibly the 10-year bond – outright if circumstances warranted. 

“Information received since the Committee met in December suggests that the economy has weakened further,” the Federal Reserve said in its statement. “Industrial production, housing starts, and employment have continued to decline steeply, as consumers and businesses have cut back spending. Furthermore, global demand appears to be slowing significantly.”

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