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Federal Reserve lowers funds rates again


MrWhite
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http://www.federalreserve.gov/newsevents/p...y/20071211a.htm

 

The Federal Open Market Committee decided today to lower its target for the federal funds rate 25 basis points to 4-1/4 percent.

 

Incoming information suggests that economic growth is slowing, reflecting the intensification of the housing correction and some softening in business and consumer spending. Moreover, strains in financial markets have increased in recent weeks. Today?s action, combined with the policy actions taken earlier, should help promote moderate growth over time.

 

Now that I've graduated and have a steady flow of income, I'm slowly turning into a finance geek, and pay attention to announcements like these. Most of my money is in liquid savings, so rate cuts like we've seen over the last few months do me more harm than good.

 

The seemingly last vehicle for high yields and liquidity are these Reward Checking accounts that are popping up throughout the country at local credit unions. There's one here in South Florida that I've recently opened, which gives you an APY of 6.01% each month with a few strings attached (You have to use their debit card for 12 transactions each month, pay 3 bills a month with their service, and receive online statements). Hopefully they will keep their rates up amidst these announcements.

 

There doesn't appear to be any financial-based thread on this board, so I figured this could become a thread to discuss any future news, as well as any personal financial discussion (Savings, Credit Cards, 401(k)s, etc.)

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In Alan Greenspan's new book, he suggests that the Fed will have to raise interest rates into the double digits in the foreseeable future to fight off inflation. Let's hope it never comes to that.

 

My fiancee and I have been keeping an eye on housing prices here in the area over the last 6 months, and it's amazing how hard this credit crunch has hit. The last report I saw had the housing surplus at 24(!) months, we'll be looking to buy at around the 18-24 month mark when prices have bottomed out.

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I keep hearing that it's too little, too late.

 

I've been learning more about the subprime mortgage disaster

 

Yeah, I work knee-deep in it. Fortunately I survived when our company had mass layoffs.... :o

 

I really cannot fathom how the leaders of this industry could have been so short-sighted over the past decade. Although there's plenty of blame to be tossed around on all sides.

 

 

In Alan Greenspan's new book, he suggests that the Fed will have to raise interest rates into the double digits in the foreseeable future to fight off inflation. Let's hope it never comes to that.

 

Did he happen to mention in his book about all the praise he had for the "creative lending" practices that helped bring about this mess?

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