Feds Poised To Make Another Cut On Interest Rates

March 19, 2008

(Long Island, N.Y.) Top bigwigs at the Bureau of Federal Reserves headed by Chairman Ben Bernanke will convene today in a meeting to determine the course of action needed to guide the fledgling US economy in constant threat of recession.

On Monday, President George W. Bush requested the presence of top US economic officials including Bernanke, US Treasury Secretary Henry Paulson, United States Securities and Exchange Commission Chairman Christopher Cox and several members of congress’s monetary committee to discuss the current state of the US economy in which the President described earlier in an interview as “challenging times”.

“Now the issue is fighting the deeper recession,” said Brian Bethune who is an economist at Global Insight in New York. “It has kind of moved to another level. The fires are spreading,” He also criticized the way Federal reserves handled key economic issues such as the collapse of Stern Bears Cos. last week in which the feds scrambled in trying to infuse monetary aid to the struggling investment house company which was widely considered as one of the biggest in the world. “It all kind of sends a conflicting message — making people more nervous. Why is the Fed every week coming out with another major injection of liquidity or a bailout? What are they doing in Washington? Some talk is best left with your wife over a glass of wine in the evening,” Bethune said. “Talking publicly sometimes is not the way to go.”

Financial experts and top economist in the US believes that the Feds are primed to cut key interest rates further to an estimated full point deduction which would decrease current rate which stands at 3 percent to its lowest since October of 2004 to settle at 2 percent. Gradual slashing of interest rates has already been accommodated since September of last year in an effort to stimulate consumer spending thereby giving a boost to the US economy. On Monday, Bernanke and the Feds decreased emergency lending rate to banks and investment houses by a quarter-point to 3.25 percent. “These steps will provide financial institutions with greater assurance of access to funds,” Bernanke said.

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