The Fed Cuts Interest Rates
Stratfor says that cash from overseas will come flooding into the US stock market looking for safe havens in the wake of the global panic that hit overseas on Monday.
That presumes there is confidence in the US economy. The Federal Reserve today cut interest rates the biggest one day cut since October 1984 when rates came down 175 basis points. The Fed is doing a lot very quickly to try and get on top of the deteriorating financial crisis. Here is part of the the Fed statement:
"The Federal Open Market Committee took this action in view of a weakening of the economic outlook and increasing downside risks to growth.
While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households."Moreover, incoming information indicates a deepening of the housing contraction as well as some softening in labour markets."
Clearly the Fed see dangerous rapids ahead and is trying to take steps to turn things around. It should be an interesting week in the markets.
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Darris McNeely
Darris McNeely works at the United Church of God home office in Cincinnati, Ohio. He and his wife, Debbie, have served in the ministry for more than 43 years. They have two sons, who are both married, and four grandchildren. Darris is the Associate Media Producer for the Church. He also is a resident faculty member at the Ambassador Bible Center teaching Acts, Fundamentals of Belief and World News and Prophecy. He enjoys hunting, travel and reading and spending time with his grandchildren.
