Urgently trying to keep cash flowing amid a Wall Street meltdown, the Federal Reserve on Tuesday pumped $50 billion into the nation’s financial system to help ease credit stresses.
The Federal Reserve Bank of New York’s action comes in addition to its regular market operations to inject $20 billion into the system slated for the day.
The maneuver takes place as Federal Reserve Chairman Ben Bernanke and his central bank colleagues prepare to meet to decide their next move on interest rates and conduct a fresh assessment of the country’s financial and economic troubles.
Some believe the financial system turmoil raises the odds the Fed will cut rates. Others still predict the Fed will hold its key rate steady at 2 percent.
If the Fed were to cut its benchmark rate, the prime lending rate for millions of consumers and businesses — currently at 5 percent — would drop by a corresponding amount. The prime rate applies to certain credit cards, home equity lines of credit and other loans. The Fed’s key rate and the prime rate are at four-year lows.
Even if the Fed doesn’t lower rates, analysts think the central bank could switch signals and suggest it could cut rates sooner down the road.
(CBS2 HD / WNBC.com)
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4 Responses
Where did the gov. get an extra 50 bil. from?
I didn’t know that they had all that extra cash!
Is anyone in charge or is printing gelt really that easy?!
This is mamesh the sugya of the daf – hailach, here it is and do what you need with it.
Moshiach’s tzaiten.
#1 please explain yourself
“printing gelt” – you are so old-fashioned – what do you think this is? Berlin 1923?
They just press the “cheat” button on their computer game (“Central Banking Tycoon”). It’s a cool game but you have to the Central Bank of a country to play.
It’s you and me who chipped-in to “help” out while many bandits will walk away from this with millions…
Comment: I know someone who may go into foreclosure, heaven forfend, whose adjustable rate went up to 11.5% on an expensive home. They cannot afford to pay that amount, but can pay the amount they used to pay, last year.
The requested a loan rate reduction to about 5 or 6%, which they can afford and because they fell behind, they could not get a lower rate than 11.5%.
If these bad mortgage loan officers will not lower the interest rate below even 10%, and these loans go bad, why-should-we-bail out these companies when the top execs walk away with millions in bonuses?????