- ISIL creates all-female brigade to terrorize women into following Sharia law
- ISTOOK: Obama wants to be impeached
- Obama to Latin leaders: Help with border
- Military bans troops from Baptist church event honoring ‘God’s Rescue Squad’
- ‘Pocket drones’: U.S. Army developing tiny surveillance tools for the next big war
- Belgian cafe posts sign: Dogs allowed, but Jews stay out
- Gen. Dempsey: Pentagon studying Russian readiness plans not viewed ‘for 20 years’
- John McCain: Botched, two-hour execution of murderer is ‘torture’
- House GOP ready to move border bill
- Bomb squad called after live WWII artillery washes on Cape Cod beach
Fed cuts key interest rate half-point to 1 percent
Question of the Day
Even consumers who would like to spend are having trouble doing so because of a shortage of credit available from banks, the Fed noted. “The intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit.
The rate cuts and numerous other Fed maneuvers pumping money into the banking system this year have been aimed at restoring health to the credit markets and encouraging banks to lend more. Nevertheless, a monumental retrenchment in financial markets has persisted since mid-September, with only moderate responses to the Fed’s ministrations.
Financial markets responded mildly to the Fed’s rate cut, which was largely anticipated. The Dow Jones Industrial Average ended down 74 points.
Because of the pervasive fears that are freezing up financial markets, some analysts questioned whether the Fed’s rate cut would do much good.
“It does not address the leverage and credit issues in the banking system” which are stymieing lending, while it “penalizes savers,” who are earning miniscule interest rates on their savings deposits, said Martin Hutchinson, analyst at Breakingviews.com.
Joachim Fels, economist with Morgan Stanley, said the strenuous efforts of the Fed and other world central banks are needed, however, and eventually will bear fruit.
“Monetary policy will eventually get traction, though the timing is highly uncertain,” he said. “And if the policies used so far don’t work, we believe the central bank and government won’t shy awway from even more unorthodox measures.”
About the Author
- Energy Department eyes regional gas reserves for emergency use
- Economists see signs of another market bubble
- Crude oil will head north of the border to Canada
- S&P: Boeing to suffer if Ex-Im Bank killed
- U.S. job gains, unemployment dip push markets into record territory
Latest Blog Entries
By Mark Davis
The nation founders, the Lone Star State thrives
- Rahm Emanuel: Send illegal immigrant shelter kids to Chicago
- 'Pocket drones': U.S. Army developing tiny spies for the next big war
- Tactical advantage: Russian military shows off impressive new gear
- CURL: Obama, staffers not even pretending any more
- Pentagon running out of time to find mass of missing weapons in Afghanistan
- Family of Marine killed in Afghanistan pushes back against cover-up
- NAPOLITANO: What if our democracy is a fraud?
- Military bans troops from Baptist church event honoring 'God's Rescue Squad'
- WEST: Those who would rather join the jihadi army than their own nation's army
- Obama orders Pentagon advisers to Ukraine
Obama's biggest White House 'fails'
Celebrities turned politicians
Athletes turned actors
20 gadgets that changed the world
Fighting in Iraq