Tuesday, October 7, 2008

“Absolutely, it’s a stealth easing,”

Fed Sets Floor Below Rate Target, Engineering `Stealth' Cut

Oct. 7 (Bloomberg) -- The Federal Reserve may have trimmed borrowing costs yesterday without actually saying so. The central bank used power granted under last week's financial-rescue legislation to effectively set a floor under its main interest rate that's lower than the 2 percent target set by policy makers last month. The Fed may now pay interest on bank reserves while it floods financial markets with liquidity, pushing down the overnight lending rate by about 0.75 percentage point to 1.25 percent.

Posted by malct @ 11:09 AM (453 views)
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2 thoughts on ““Absolutely, it’s a stealth easing,”

  • I would appreciate if someone with the financial know how could explain this to me in layman’s terms. I have a feeling the 4 to 500 bill passed through congress has some very nasty wording in it.

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  • Transparency. I wonder if the Nationwide, Halifax & Government operate this tactic with the housing market. I won’t be to long before people are completely turned off by all this nonsense.

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