Fed Trims Key Interest Rate By ¼ Point

Moving Less Aggressively Than Before, Central Bank Cuts Rate As Economy Continues Slump

(CBS/AP)  The Federal Reserve has cut a key interest rate by a quarter-point, a smaller move than the aggressive easing it undertook earlier this year.

The Fed action, announced Wednesday after a two-day regular meeting, pushed the federal funds rate down to 2 percent, its lowest level since late 2004. It marked the seventh consecutive rate cut by the central bank since it began easing credit conditions last September to combat the growing threat of a recession brought on by a deep housing slump and credit crisis.

The rate cut will mean lower borrowing costs throughout the economy as banks reduce their prime lending rate, the benchmark for millions of consumer and business loans.

The Fed move was in line with expectations. Wall Street believes this could well wrap up the Fed's rate cuts unless the economy threatens to fall into a worse slump than currently expected.

The Fed said it stood ready to "act as needed to promote sustainable economic growth and stability." That phrase was seen as a signal that the Fed is as worried about weak growth as it is about the risk of higher inflation.

The Fed devoted portions of its statement to both the threats of weakness and the threats that inflation could pose, likely reflecting the debate inside the central bank.

There were two dissents from the move, with both Richard Fisher, president of the Dallas regional Fed bank, and Charles Plosser, head of the Philadelphia Fed, arguing that the central bank should make no change in rates.

The central bank is walking a tightrope, trying to jump-start economic growth while also confronting the risk that if it overdoes the credit easing it could make inflation worse down the road.

Many economists believe the country has fallen into a recession. However, the government reported Wednesday that the overall economy, as measured by the gross domestic product, managed to eke out a 0.6 percent growth rate in the January-March quarter, barely in positive territory.

White House press secretary Dana Perino said it's good the economy did not contract and President Bush still believes tax rebates that began this week will give the economy a needed boost, reports CBS News White House correspondent Mark Knoller.

On the overall economy, Fed Chairman Ben Bernanke and his colleagues said in their statement explaining the decision that "economic activity remains weak" with subdued spending by businesses and households.

"Financial markets remain under considerable stress and tight credit conditions and deepening housing contractions are likely to weigh on economic growth over the next few quarters," the Fed officials said.

While saying the central bank expected inflation to moderate in coming months, the Fed statement said that "uncertainty about the inflation outlook remains high," adding that it would be necessary to "continue to monitor inflation developments carefully."

The quarter-point move followed a string of more aggressive rate cuts ranging from a half-point to three-fourths-point in the first three months of this year as the central bank was battling to stabilize financial markets roiled by multibillion-dollar losses caused by rising mortgage defaults.

That turmoil claimed its biggest victim on March 16 when Bear Stearns came to the brink of bankruptcy and the Fed stepped forward with a $30 billion line of credit to facilitate a sale of the nation's fifth largest investment bank to JP Morgan Chase.

However, credit markets, while not back to normal, have stabilized and many analysts believe the worst may be over - although they caution that this forecast could prove too optimistic if the housing slump deepens further, causing even more mortgage defaults than now expected.

Before the Fed made its first rate cut in September, the funds rate had stood at 5.25 percent.

While many economists believe the country is in a recession, the expectation is that it will be a short one ending this summer. If that turns out to be correct, the Fed may hold rates steady for the rest of this year with the next move being a rate increase sometime next year when the economy is on sounder footing.

[omega39-2009]

I really don''t see the point of devaluing the dollar even more when inflation is going through the roof. It''s not like the banks are still willing to lend money anyway.

[jn122736]

What is the inflation rate today?

The price of almost everything, necessary for survival, has at least doubled, and in many cases quadrupled, over the past 7 years.
In the Carter years, inflation rates were in double digits, and intersect rates reflected that by increasing proportionately (Bush apologists have posted those facts repeatedly whenever the present economy is being criticized).

The price of dry powdered milk (usually a very stable commodity) has gone from $7.99 per 20-quart box to $13.99, eggs from $.50 to $2 per dozen, vegetable cooking oil from. $.69 per 48oz to $3.99 (advertised sale price), Gas from less than $1 per gallon to $3.5 (here in SW Missouri),

Inflation is definitely rampant and interest rates are dropping drastically.
That is just the opposite of what they did in the 1970%u2019s.
Many folks use CD accounts to help increase their retirement income. CD%u2019s that were paying 5.25% interest just 6 months ago have dropped to 2% or less.

Instead of fighting inflation by increasing interest rates, the rates are dropping to the point where the government will soon be PAYING people to buy on credit and actually applying fees to CD accounts.
But then, what else can we expect from an administration that has borrowed over $4 trillion and are currently borrowing money FOR consumers (stimulus package rebates)

The true inflation rate is obviously being hidden or intentionally misstated/falsified.

[mediapreachr]

The article fails to mention that the actual cause of inflation is caused by lowering rates.
More to the point-the person who''s picture is on top of the page-a paid coward-is the direct cause of your misery.

[lochlan-2009]

Fed rate cut = dollar loses value = commdities(oil) goes up = Americans get screwed while oil company profits roll in the $$$.

[forthepeopl1]

PEOPLE - - BEGIN TO RESEARCH and PROBE THIS ! ! ! !

SPECIAL "CLOSED SESSION" OF U.S. HOUSE OF REPRESENTATIVES

Word has begun leaking from last nights special,
Closed-door session of the United States House of Representatives.
Not only did members discuss new surveillance provisions as was the publicly stated
Reason for the closed door session, they also discussed :

1. The Imminent Collapse of the U.S. economy to occur by September 2008
2. The imminent collapse of US federal government finances by February 2009
3. The possibility of Civil War inside the USA as a result of the collapse
4. Advance round-ups of "insurgent U.S. citizens" likely to move against the Government
5. The Detention of those rounded-up at "REX 84" camps constructed throughout the USA,
6. The possibility of retaliation against members of Congress for the collapses
7. The Location of "safe facilities" for members of Congress and their families
To reside during expected massive civil unrest
8. The necessary and unavoidable merger of the United States with Canada
(for its natural resources) and with Mexico (for its cheap labor pool)
9. The issuance of a new currency - THE AMERO -
For all three nations as the proposed solution to the coming economic armageddon.

Members of Congress Have Been FORBIDDEN to reveal what was discussed
Several are so furious and concerned about the future of the country,
they have begun leaking info.

[omega39-2009]

Fed Trims Key Interest Rate By < Point

Oh good, I''ll be able to sleep tonight...

[davidlar2]

Bernanke should be tried and executed for treason (and I don''t normally believe in the death penalty).

He has deliberately sacrificed the future of the US economy by stoking inflation, just so he and his buddies on Wall Street can make a short term profit. Deliberately sabotaging one''s country from a position of power for personal gain seems to fit the definiton of treason.

[underdogus]

Ben Bernanke..looks like the Titanic''s captain John Smith..yaiks!!

[underdogus]

Ben Bernanke..looks like the Titanic''s captain John Smith..yaiks!!

[forthepeopl1]

PEOPLE - - BEGIN TO RESEARCH and PROBE THIS ! ! ! !

SPECIAL "CLOSED SESSION" OF U.S. HOUSE OF REPRESENTATIVES

Word has begun leaking from last nights special,
Closed-door session of the United States House of Representatives.
Not only did members discuss new surveillance provisions as was the publicly stated
Reason for the closed door session, they also discussed :

1. The Imminent Collapse of the U.S. economy to occur by September 2008
2. The imminent collapse of US federal government finances by February 2009
3. The possibility of Civil War inside the USA as a result of the collapse
4. Advance round-ups of "insurgent U.S. citizens" likely to move against the Government
5. The Detention of those rounded-up at "REX 84" camps constructed throughout the USA,
6. The possibility of retaliation against members of Congress for the collapses
7. The Location of "safe facilities" for members of Congress and their families
To reside during expected massive civil unrest
8. The necessary and unavoidable merger of the United States with Canada
(for its natural resources) and with Mexico (for its cheap labor pool)
9. The issuance of a new currency - THE AMERO -
For all three nations as the proposed solution to the coming economic armageddon.

Members of Congress Have Been FORBIDDEN to reveal what was discussed
Several are so furious and concerned about the future of the country,
they have begun leaking info.

[forthepeopl1]

PEOPLE - - BEGIN TO RESEARCH and PROBE THIS ! ! ! !

SPECIAL "CLOSED SESSION" OF U.S. HOUSE OF REPRESENTATIVES

Word has begun leaking from last nights special,
Closed-door session of the United States House of Representatives.
Not only did members discuss new surveillance provisions as was the publicly stated
Reason for the closed door session, they also discussed :

1. The Imminent Collapse of the U.S. economy to occur by September 2008
2. The imminent collapse of US federal government finances by February 2009
3. The possibility of Civil War inside the USA as a result of the collapse
4. Advance round-ups of "insurgent U.S. citizens" likely to move against the Government
5. The Detention of those rounded-up at "REX 84" camps constructed throughout the USA,
6. The possibility of retaliation against members of Congress for the collapses
7. The Location of "safe facilities" for members of Congress and their families
To reside during expected massive civil unrest
8. The necessary and unavoidable merger of the United States with Canada
(for its natural resources) and with Mexico (for its cheap labor pool)
9. The issuance of a new currency - THE AMERO -
For all three nations as the proposed solution to the coming economic armageddon.

Members of Congress Have Been FORBIDDEN to reveal what was discussed
Several are so furious and concerned about the future of the country,
they have begun leaking info.

[jamessmith13]

Thank God the idiot running the Federal Reserve only has 8 more bullets left in this gun with interest rate cuts. At the rate he is devaluating the dollar, oil will be $150 a barrel, and then we will see what happens to this economy.

[arlt1627]

Eventually it will be a good thing to RAISE interest rates.....someday.

[jamessmith13]

Thank God the idiot running the Federal Reserve only has 8 more bullets left in this gun with interest rate cuts. At the rate he is devaluating the dollar, oil will be $150 a barrel, and then we will see what happens to this economy.

[jamessmith13]

Thank God the idiot running the Federal Reserve only has 8 more bullets left in this gun with interest rate cuts. At the rate he is devaluating the dollar, oil will be $150 a barrel, and then we will see what happens to this economy.

[jamessmith13]

Thank God the idiot running the Federal Reserve only has 8 more bullets left in this gun with interest rate cuts. At the rate he is devaluating the dollar, oil will be $150 a barrel, and then we will see what happens to this economy.

[bankscheat]

Why do we care if the Feds lower the interest rate? The banks are the only concern the goverment has. The consumer won''t see interest rates lower. In fact, the banks keep making them higher! If the banks get the money from the government (our money) for 2% percent and then charge us 24% (credit cards) who''s doing great? Lets do the math and stop banks that cheat.

[forthepeopl1]

PEOPLE - - BEGIN TO RESEARCH and PROBE THIS ! ! ! !

SPECIAL "CLOSED SESSION" OF U.S. HOUSE OF REPRESENTATIVES

Word has begun leaking from last nights special,
Closed-door session of the United States House of Representatives.
Not only did members discuss new surveillance provisions as was the publicly stated
Reason for the closed door session, they also discussed :

1. The Imminent Collapse of the U.S. economy to occur by September 2008
2. The imminent collapse of US federal government finances by February 2009
3. The possibility of Civil War inside the USA as a result of the collapse
4. Advance round-ups of "insurgent U.S. citizens" likely to move against the Government
5. The Detention of those rounded-up at "REX 84" camps constructed throughout the USA,
6. The possibility of retaliation against members of Congress for the collapses
7. The Location of "safe facilities" for members of Congress and their families
To reside during expected massive civil unrest
8. The necessary and unavoidable merger of the United States with Canada
(for its natural resources) and with Mexico (for its cheap labor pool)
9. The issuance of a new currency - THE AMERO -
For all three nations as the proposed solution to the coming economic armageddon.

Members of Congress Have Been FORBIDDEN to reveal what was discussed
Several are so furious and concerned about the future of the country,
they have begun leaking info.

[bankscheat]

Why do we care if the Feds lower the interest rate? The banks are the only concern the goverment has. The consumer won''t see interest rates lower. In fact, the banks keep making them higher! If the banks get the money from the government (our money) for 2% percent and then charge us 24% (credit cards) who''s doing great? Lets do the math and stop banks that cheat.

[blackwater66-2009]

I thought I would retiree this year, but looking at the worthless dollar these days , I''m a little frighten,
What say thee ??

[cfin5]

James Madison

(Architect of the U.S. Constitution & Co-Author of the Federalist Papers)

"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling the money and its issuance."

"There are more instances of the abridgement of the freedom of the of the people by the gradual and silent encroachment of those in power, than by violent an sudden usurpation."

[barryrose1]

whose the real winner with the feds cut? Not the consumer!!

[barryrose1]

whose the real winner with the feds cut? Not the consumer!!

[barryrose1]

whose the real winner with the feds cut? Not the consumer!!

[lastdance116]

Spammers have Seized - The CBS News .. Web Site away from
The CBS News Management - AGAIN

Spammers posting Spam and Profanity - 24/7 on CBS ....
CBS News Management Approved Spam -

CBS News Seized By Chronic - Habitual Spammers - Again !
Chasing Away Serious Posters and former Patrons of CBS ...
Commercial Advertisers should take more Consideration in the Money they Spend
On the Incompetent and Inept - CBS News Management
_____________
ou make very silly connections. So silly they''''re stupid.
Posted by mudrose at 04:20 PM : Apr 30, 2008
________
First Amendment they need some more water. Hurry get to the trough and give
them more water. Posted by mudrose at 02:18 PM : Apr 10, 2008
________
The Rainbow coalition. Pansies,Poverty Pimps, Murderers, and Victims.
Posted by mudrose at 02:15 PM : Apr 10, 2008
_____
privilege of shoot you bowels off and thinking you are saying something significant?
Huh? Huh? Posted by mudrose at 02:13 PM : Apr 10, 2008
______
Seems the scumbag wasn''''t paying any attention. Just like you witless.
Posted by mudrose at 02:11 PM : Apr 10, 2008
________
srdesert48? I''''m checking. Posted by mudrose at 02:10 PM : Apr 10, 2008
_______
Shingles1, English? Posted by mudrose at 02:09 PM : Apr 10, 2008
______
ou''''ll get a lot of his bigotry and racism. It''''s his typical white person
commentaries that I find uplifting. Posted by mudrose at 02:07 PM : Apr 10, 2008

[kissamaarse]

The Fed cuts the federal funds rate again, yet the credit card companies are all increasing rates and fees. Again. If the credit card providers want to say to Americans, "Let them eat cake," then shouldn''t Americans say, "Off with their heads?"

[shanev137]

The rate cut will mean lower borrowing costs throughout the economy as banks reduce their prime lending rate, the benchmark for millions of consumer and business loans.


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


That''s actually not true at all.

Consumer loan rates will only drop if banks decide to drop them.

Just because the Fed lowers their rate doesn''t mean banks automatically pass it on to consumers.

[randynason]

-Too little, too late. The Feds were so timid and afraid to say the "R" word, while we were already settling into it. Now that they are talking openly about the "R" word, the situation appears to me to look more like the "D" word. This scenario has all the markings of a run, frankly.

[randynason]

-Too little, too late. The Feds were so timid and afraid to say the "R" word, while we were already settling into it. Now that they are talking openly about the "R" word, the situation appears to me to look more like the "D" word. This scenario has all the markings of a run, frankly.

[randynason]

-Too little, too late. The Feds were so timid and afraid to say the "R" word, while we were already settling into it. Now that they are talking openly about the "R" word, the situation appears to me to look more like the "D" word. This scenario has all the markings of a run, frankly.

[randynason]

-Too little, too late. The Feds were so timid and afraid to say the "R" word, while we were already settling into it. Now that they are talking openly about the "R" word, the situation appears to me to look more like the "D" word. This scenario has all the markings of a run, frankly.

[sharncedar]

Gotta love that Bernanke. He is a big-time inflation fighter .... uh, well maybe not. He is a guy we can trust, a guy who won''t expand the money supply in a heedless manner ... uh, well maybe not.

I wonder if anything could be worse than the Fed, for example if there were no Fed and a fixed rate of 5.5% it would certainly be better, if there was a fixed system that increased money supply exactly with growth in real GDP it would be better.

The Fed has lost its prestige and no one trusts them anymore, and that''s a problem.

[randynason]

I feel like the depression is getting to me. Ya know what I mean?

[sparks224]

Oh great, now the Dollar is even more worthless.

[ontheleft]

The last thing that the government should be doing is lowering interest rates. Lenders have tightened credit regardless of what the Fed is doing. It only weakens the dollar further, increases inflation, and hurts retirees who depend on income that''s tied to the Fed rate.

[gullly815]

With this new rate cut, senior citizens are seeing another decrease in their incomes. Those of us who roll over CD''s, hold Bank Money Markets etc. are again being penalized, by having our income reduced.

How are we suppose to go out and spend money, when we are forced to live on less than we previously had?

The Fed does not take this consumer angle into consideration when they make these rate decreases.

Whose watching out for us and our income?

[gullly815]

With this new rate cut, senior citizens are seeing another decrease in their incomes. Those of us who roll over CD''s, hold Bank Money Markets etc. are again being penalized, by having our income reduced.

How are we suppose to go out and spend money, when we are forced to live on less than we previously had?

The Fed does not take this consumer angle into consideration when they make these rate decreases.

Whose watching out for us and our income?

[mcv57]

More devaluation of the dollar, more monopoly credit for the rich.

[mcv57]

More devaluation of the dollar for the poor; more monopoly credit for the rich.

[gullly815]

With this new rate cut, senior citizens are seeing another decrease in their incomes. Those of us who roll over CD''s, hold Bank Money Markets etc. are again being penalized, by having our income reduced.

How are we suppose to go out and spend money, when we are forced to live on less than we previously had?

The Fed does not take this consumer angle into consideration when they make these rate decreases.

Whose watching out for us and our income?

[pensacola88]

I have seen the interest rate go down for the banks, but I have not seen them pass this discount through to me. The only one who makes more money on this is the banks. Subsidizing a bank amounts to corporate welfare. I can see how a CEO of a national bank can assure himself a profit and keep a nice bonus active for himself and his senior staff, but I have never seen the tellers I visit talk about ever seeing a penny of benefit.

If a bank can''t survive, close it!!! If a bank can''t make money offering credit, stop offering credit!!! The same rules that apply to me should apply to banks.

[pensacola88]

I have seen the interest rate go down for the banks, but I have not seen them pass this discount through to me. The only one who makes more money on this is the banks. Subsidizing a bank amounts to corporate welfare. I can see how a CEO of a national bank can assure himself a profit and keep a nice bonus active for himself and his senior staff, but I have never seen the tellers I visit talk about ever seeing a penny of benefit.

If a bank can''t survive, close it!!! If a bank can''t make money offering credit, stop offering credit!!! The same rules that apply to me should apply to banks.

[pensacola88]

I have seen the interest rate go down for the banks, but I have not seen them pass this discount through to me. The only one who makes more money on this is the banks. Subsidizing a bank amounts to corporate welfare. I can see how a CEO of a national bank can assure himself a profit and keep a nice bonus active for himself and his senior staff, but I have never seen the tellers I visit talk about ever seeing a penny of benefit.

If a bank can''t survive, close it!!! If a bank can''t make money offering credit, stop offering credit!!! The same rules that apply to me should apply to banks.

[gkc99]

Bushit: "Americans don''t save enough".

Bushit: "Drop interest rates more and bail out my billionaire banker friends! F*ck the savers--isn''t 1% enough for those greedy bustards?

[downsteamjim]

Growth of 0.6% is a new definition of recession.

[tylenol6]

Wake up people....The federal reserve is not really the
federal government. They are a bunch of elitist bankers.
The federal reserve is a FRAUD......Vote for Ron Paul.
Guaranteed you will like what he has to say. Everything
he has said about the economy has come true. Listen to
Ron Paul.

[marcosis78]

I heard on CBS or ABC that lowering interest rates actually raises oil/gas prices because it devalues the dollar (as if it can get any less). Is that true?

[wardoglrs]

Watch this vid and see where the money goes. See how your being robbed. You will learn how it takes a bank to rob a bank at your expence. You will see how this effects the poor and why they get poorer.

www.ideachannel.tv

[lochlan-2009]

Now Congress needs to put a huge (I mean gigantic) tax on the oil companies.

[lochlan-2009]

Now Congress needs to put a huge (I mean gigantic) tax on the oil companies.