The Federal Reserve slashed a key interest rate by three-quarters of a percentage point Tuesday, the latest in a series of moves by the central bank to try and restore confidence in the economy and battered financial markets.
The Fed cut its federal funds rate, an overnight bank lending rate, to 2.25%. It is the sixth cut in the past six months and comes at a time when the Fed is trying to keep the economy from slipping into recession - although many think it's already entered one.
Some economists have argued the rate cuts will cause a continued weakening in the value of the dollar and a further spike in commodity prices -- which could lead to higher prices for gas, food and imported goods. According to a new national CNN/Opinion Research Corp. poll released Tuesday, Americans said inflation is their top economic concern.
The Fed acknowledged in its statement that inflation pressures have grown more than expected, and it promised to monitor prices in the months ahead. But it said it still believed the greater risk to the economy was that of slowing growth, not a spike in prices.
read the CNN story
Inflation is a far bigger threat than a necessary and needed market correction.
No comments:
Post a Comment