Finally, the Federal Reserve Bank dropped their primary lending rate from 2% to 1.5%. Its a significant drop, and has been described as an “emergency” measure.
Around the time the $700 billion bailout was introduced, I suggested that the Fed held off on lowering rates to that they could later have more options if they needed them. Whether or not I was right, I’m sure the Fed is thankful that they still have some room to drop the rate.
The danger here is inflation, and while that is a serious problem to watch, a recession is a serious problem too. And worse, market stagnation can cause some serious loss of value in a short period of time, as we’re seeing the stock market plummet day after day.
The party is over folks, time to get back to real work.
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