Fed Seems Poised to Lower Interest Rates Again at Its Meeting Tuesday

[babylonsister]

Fed seems poised to lower interest rates

Fed Seems Poised to Lower Interest Rates Again at Its Meeting Tuesday

JEANNINE AVERSA
AP News

Dec 09, 2007 05:33 EST

A lot has changed since the Federal Reserve hinted two months ago that it might be finished cutting interest rates for a while. Credit has become harder to obtain, Wall Street has convulsed again and the housing slump has intensified. As a result, policymakers at the central bank now appear to have changed their minds about the need to drop interest rates again.

The Fed had cut rates twice this year and officials suggested in October that might be enough to help the economy survive the credit and housing stress. Then the problems snowballed, leading Fed Chairman Ben Bernanke to signal that one more cut might be needed.

Analysts expect the Fed to trim its key rate, now at 4.5 percent, by one-quarter of a percentage point at the meeting Tuesday. Some even speculate about the possibility of a half-point cut.

Banks, financial companies and other investors who made loans to people with spotty credit or put money into securities backed by those subprime mortgages have lost billions of dollars. Investors in the U.S. and abroad have grown more wary of buying new debt, thereby aggravating the credit crunch.

All this has added to the turmoil on Wall Street, and Bernanke and other Fed officials say they must take it into account when deciding their next move.

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http://talkingpointsmemo.com/news/2007/12/fed_seems_poised_to_lower_inte.php

[RB TexLa]

1. Of course. Only place this would do anything for me would be that my credit card rates go down, if

if I were to ever carry a balance on one of them.

[aquart]

2. And the cost of food will go straight up. Stagflation.

Nothing has a hope of getting better until the criminals are in the jails instead of in the banks and Congress.

[ThomWV]

3. That would make today a very good day to buy stocks and friday morning a good time to sell

[wishlist]

4. I have a CD maturing in a few days. Hope I can renew before rate is lower

It pays to check around with a lot of different banks since some won't give you diddly squat interest but other banks are keeping their rates up pretty good since the tight money situation is causing them to offer competitive rates at least in my area. Some have even offered 5.5% deals lately, and these are highly rated major banks.