Fed Cuts Rate!

August 17, 2007

http://www.nytimes.com/2007/08/18/business/17cnd-fed.html?ex=1345089600&en=5596e4064fe998bc&ei=5088&partner=rssnyt&emc=rss

This was a very suprising move by the Fed to cut the rate by a half a percentage point.  I have two questions.  Is the situation worse then I had feared or is this just a political move to make sure the economy is still going strong as the Bush’s term ends.  It was my opinion that it is not the job of the fed to ensure that the market never goes down.

I thought they were very concerned about inflation.  I guess now it isn’t an issue which leaves me to think that the current economic situation is worse than I thought.

E

P.S. Now with Country Wide Home Mortgage tanking it appears that the Fed was concerned about a spreading problem.  It looks like Alan Greenspan set us up for a big fall when the fed slashed rates so far earlier in the Bush administration.

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