U.S. Federal Reserve Orders Emergency Rate Cut to 1.5 Percent
Fed Orders Emergency Rate Cut to 1.5 Percent
The Federal Reserve and a consortium of European central banks today announced a half a point cut in a key interest rate, a coordinated effort to stave off an economic slump even as they continue struggling to tackle a crisis in global financial markets.
The announcement eased losses on European stock markets and buoyed U.S. market futures that were pointing towards another troubled day on Wall Street.
The rate cuts, hinted at by Fed chairman Ben S. Bernanke yesterday then approved by the central bank overnight, reduces the target federal funds rate to 1.5 percent from 2 percent.
Joining the rate cut were central banks in Canada, England, Sweden, Switzerland and the European Central Bank.
With commodity prices falling and concerns about an economic slowdown taking root around the globe, the Fed in a statement said that it was now time to shift the focus from controlling inflation to bolstering growth. Lower interest rates make it cheaper for companies to borrow to invest in offices, factories and equipment, and brings down the cost of a variety of consumer credit options such as bank credit cards and auto loans.
While recent policy efforts, including the $700 billion financial bailout package enacted last week, have focused on stabilizing the financial system and ensuring an adequate supply of cash for banks, the interest rate cut addresses more directly a developing economic slowdown.
If anything good comes from this worldwide financial crisis it will be that governments throughout the world are calling for greater oversight of banks and other financial institutions.
The current crisis was caused by the unfettered greed of American banks, egged on by irresponsible politicians.
I wonder whether governments, banks, businesses and individuals will eventually be able to sue the American government for its incredible stupidity in causing the international financial crisis.
America’s actions have often plunged the world into crisis mode and they continue to do so. If they are not attacking countries based on the lies of a clearly deluded president, they are are justifying torture and other human rights violations.
This irresponsible country also violates the privacy of people around the world, all in the name of the so-called fight against terrorism. Those idiots in Washington think America is the world’s policeman, but they cannot even run their own country properly.