 Video
From higher gas prices, to a sluggish housing market, the weak US economy is hitting many Americans hard. So its no surprise that talk of an emergency Fed rate cut is getting a lot of buzz. Investment bank Goldman Sachs said in a research note, such a cut is possible before the Fed's next meeting on March 18th, only a week away. Fact and Opinion economics Chief Economist Robert Brusca however, says that's unlikely: SOUNDBITE: Robert Brusca, Chief Economist, Fact and Opinion Economics, saying (English): "I think that the Fed will wait til the meeting because it really doesn't want to get in the habit of having inter meeting rate cuts and uh it will have an intermeeting rate cut if there is some disaster that sort of calls the fed out, apart from that I think you wait for the fed to act during a meeting." The Fed has already been taking steps to boost liquidity in the economy-- just Friday it announced emergency measures to add $200 billion dollars into the banking system. But it remains to be seen how effective that will be: SOUNDBITE: Robert Brusca, Chief Economist, Fact and Opinion Economics, saying (English): " These liquidity injections, these enhanced half auctions are going to be helpful for funding in the market. They are not really emergency actions but they are injections of liquidity to help institutions that are having funding difficulty and the main problem is that you are having a situation where financial institutions aren't trusting each other I mean in some sense the more the fed does this the less they are going to trust each other because they'd rather transact with the fed than one another but at some point you have to wean them off of these transactions with the fed, you've got to get them to transact with one another. " With oil prices at record highs, and the dollar continuing to tumble, more fed action is factored into the market- the only question seems to be the timing. Bobbi Rebell, Reuters, New York. COMPANIES MENTIONED: SYMBOLS:
Rating: (1 ratings) |
Views: 4 |
Added: Mar 13, 2008 |
| Category: Business |
|
|
|
Tags: news, nuvu, ibctoday, bbc, cbc, reuters, ap, asia news international, mediascrape, nepal, romania, indonesia, nigeria, zambia, canada, united states, america, south, north, east, west, greece, china, japan, turkey, iran, israel, palestine, chile, brazil, peru, south africa, economics, business, trade, sanction, money, work, strike, price, inflation, credit, market
|