Global| Jan 22 2008FOMC Takes Aggressive Action
by:Tom Moeller
|in:Economy in Brief
Summary
After an unscheduled meeting, the Federal Open Market Committee today lowered the Federal funds rate by seventy-five basis points to 3.50%. It was the largest cut in the rate since October 1984, followed thereafter by moves either in [...]
After an unscheduled meeting, the Federal Open Market Committee today lowered the Federal funds rate by seventy-five basis points to 3.50%. It was the largest cut in the rate since October 1984, followed thereafter by moves either in 25 or 50 basis point increments. The rate was last at 3.5% in August of 2005.
Voting against the decision was St. Louis Fed President William Poole.
The discount rate also was reduced seventy-five basis points to 4.00%.
"The Committee took this action in view of a weakening of the economic outlook and increasing downside risks to growth." It came ahead of next week's regularly scheduled meeting of the FOMC.
Worried about even further deterioration in U.S. economic conditions, the Fed indicated that "Appreciable downside risks to growth remain. The Committee will continue to assess the effects of financial and other developments on economic prospects and will act in a timely manner as needed to address those risks."
Still expressing some caution, the FOMC indicated only "that it will be necessary to continue to monitor inflation developments carefully."
For the complete text of the Fed's latest press release please follow this link.
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.
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