Fed, Central Banks Announce Emergency Rate Cut

The Federal Reserve announced that it was cutting the interest rate to 1.5% from 2%: "The Committee took this action in light of evidence pointing to a weakening of economic activity and a reduction in inflationary pressures."

The press release also noted that other central banks from around the world were also "easing...global monetary conditions"--the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, Sveriges Riksbank, and the Swiss National Bank also announced interest rate cuts while the Bank of Japan also supported the action (Japan's interest rate is already 0.5%).

Derek Halpenny, currency srtategist at Bank of Tokyo-Mitsubishi UFJ, told the NY Times, "There’s no silver bullet for these problems. But the actions by the Fed on Tuesday, the U.K. government’s bailout plan today and the bit-by-bit approach European governments are taking show the authorities are getting more proactive.”

Today, U.S. stock index futures momentarily surged after the surge was announced, but CNBC is now reporting that the Dow and Nasdaq will open lower, and the S&P 500 may open slightly higher. Yesterday, the Dow fell 508 points/5%. Bloomberg News points out that this is the U.S. stock indexes' biggest annual decline since 1937.

Contact the author of this article or email tips@gothamist.com with further questions, comments or tips.

By Jen Chung in News on October 8, 2008 8:51 AM

Comments [rss]

Shinobi Shaw

If that is true #28, UNREAL!

bagelman

Just read an article about a possible SECOND BAILOUT!

Are they SERIOUS? How much more until we say enough is enough?

----------------

DENVER - House Speaker Nancy Pelosi said Wednesday that a $150 billion economic stimulus plan is needed now because of the faltering economy and she may call the House into session after the election to pass it.

http://news.yahoo.com/s/ap/20081008/ap_on_go_co/meltdown_pelosi

Leon Freilich

BANISH PANIC

Keep your composure

Do not curse

Live for the moment

Gonna get worse

Shinobi Shaw

#22 you don't just make that statement with no backing argument, WHY do you believe that is so?

During the last days of the Weimar Republic (the most free republic in Europe at the time) there was a staggering and massive inflation and near edge of an economic collapse.

What followed it was of course Nazi Germany.

A fitting comparison I might add.

bagelman

so, umm, does anybody want to place some bets, credit default swap style, about the DOW going below 9000 in the coming day(s) ?

Felix Hoenikker

20

"I hope the unavailability of credit, no matter how important it is to the economy, will force Americans to start actually living within their means and not borrow to the point of no return."

Great idea that, except for our federal government that can't/won't do the same and creates extra credit at its whim.

gossipgirl

@ EastRiver

It certainly wouldn't be the first time that someone took a Presidential's candidates word as truth.

@ ANGRYGOD11

absolutely.

Politburo

"A lot of people are indeed comparing the US right now to the last days of the Weimar Republic"

A ridiculous comparison to anyone who has any knowledge of history. I don't even know where to begin.

fugothamist

but i want a bigger house

and a fourth car

its my right as an american

Kojak

I hope the unavailability of credit, no matter how important it is to the economy, will force Americans to start actually living within their means and not borrow to the point of no return.

Average Americans share some of the blame to whats going on here, even if a lot of them are too dumb to realize that buying a house on an adjustable rate mortgage that you can barely afford is not the brightest thing to do. And banks shame on you for taking advantage of people who don't know any better.

ANGRYGOD11

Sure, spending has exploded under the Bush Administration but the policies that led to this downfall are not part and parcel W.

However, George W was elected President with a sitting Republican majority in the Senate, House and the federals courts. Policies could/should have been changed under their watch.

Shinobi Shaw

A lot of people are indeed comparing the US right now to the last days of the Weimar Republic, but of course we all know what came after that!

Politburo

There is no legal mechanism to recoup the monies paid to Wall St. employees.

EastRiver

Hey gossipgirl, go back to my post at #5 and turn on your sarcasm detector.

fugothamist

a think a few of you didn't get the sarcasm in EastRiver's comment...

although Obama is stressing the last 8 years for obvious political points, he has acknowledged that it started further back, and said as much during the primaries.

i trust is economic team to get us through this

fugothamist

lets get this money back also:

http://www.financialpost.com/most_popular/story.html?id=866284

NannyState

Low rates + high risk = Depression.

gossipgirl

@ EastRiver

Just because Obama said it doesn't mean it's true...if you listen to almost any economist they would say the problems started in the 90's during the Clinton Administration.

Sure, spending has exploded under the Bush Administration but the policies that led to this downfall are not part and parcel W.

EastRiver

EastRiver --- Naive much? Hope you enjoy eating "Obama burgers" for the next 4 years.

I have no idea what you're getting at.

We should have the oil companies bail Wall Street out.

Yes, take money from the people that actually produce a tangible product that we use in our every day lives. I have a better idea. Take the money back from the underwriters, traders, and raters of the crap paper they were selling all over the world. The salaries and bonuses were based on "profits" that resulted from valuations that had no grounding in reality. And I don't mean go after the companies only. Go after the people that actually walked off with the money.