Fed minutes: We'll step in if economy tanks
According to minutes of its Aug. 7th meeting, the Fed was ready to step in if the economy showed further deterioration.
August 28 2007: 2:34 PM EDT
WASHINGTON (Reuters) -- The Federal Reserve acknowledged at its last regular meeting that a policy response might be necessary if financial market conditions worsened, according to minutes of its Aug. 7 meeting released Tuesday.
"Members expected a return to more normal market conditions, but recognized that the process likely would take some time, particularly in markets related to subprime mortgages," the central bank's policy-setting Federal Open Market Committee said.
"However, a further deterioration in financial conditions could not be ruled out and, to the extent such a development could have an adverse effect on growth prospects, might require a policy response," the Fed said.
The Fed at its Aug. 7 held its target for the federal funds rate steady at 5.25 percent, saying the risk that inflation would fail to moderate was its predominant concern, although it noted that risks to growth had increased somewhat.
Report: Rate cut seen, but not till September
But the Fed acted unexpectedly on Aug. 17, cutting its discount rate, the rate it charges banks for loans, to 5.75 percent, and acknowledging that risks to growth had increased "appreciably" from the credit crunch afflicting financial markets.
The minutes released on Tuesday did not include discussions connected to the Fed's Aug. 17 actions. The fed funds rate is an overnight bank lending rate that has a bigger effect on the economy since it influences many consumer loans.
The minutes show policy-makers agreeing that recent strains in financial markets posed additional risks to economic growth, but believing their forecast of moderate growth would be supported by job gains, rising incomes and foreign demand for goods and services.
- Forums
- ASX - By Stock
- DJIA
- fed says we will step in if economy tanks
fed says we will step in if economy tanks
- There are more pages in this discussion • 7 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add DJIA (INDEXDJX) to my watchlist
(20min delay)
|
|||||
Last
26,683 |
Change
82.730(0.31%) |
Mkt cap ! n/a |
Open | High | Low |
26,683 | 0.00 | 0.00 |
Featured News
DJIA (INDEXDJX) Chart |
Day chart unavailable
The Watchlist
BGD
BARTON GOLD HOLDINGS LIMITED
Alex Scanlon, Managing Director & CEO
Alex Scanlon
Managing Director & CEO
SPONSORED BY The Market Online