Global| Sep 18 2007FOMC: Funds & Discount Rates Cut; Spread of Housing Weakness Feared
by:Tom Moeller
|in:Economy in Brief
Summary
At today's Federal Open Market Committee meeting the target interest rate for Federal funds was cut by 50 basis points to 4 3/4 percent. It was the first drop in the rate since 2003. The discount rate also was cut 50 basis points to 5 [...]
At today's Federal Open Market Committee meeting the target interest rate for Federal funds was cut by 50 basis points to 4 3/4 percent. It was the first drop in the rate since 2003.
The discount rate also was cut 50 basis points to 5 1/4 percent.
For the economy today's press release indicated worry that "the tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally."
Regarding inflation the Fed indicated that "that some inflation risks remain, and (the FOMC) will continue to monitor inflation developments carefully".
The decision to lower interest rates was unanimous amongst FOMC members.
For the complete text of the Fed's latest press release please follow this link
Trend Inflation and Inflation Persistence in the New Keynesian Phillips Curve from the Federal Reserve Bank of New York can be found here.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
More Economy in Brief
