Tuesday, December 16, 2008

Record Low Rate

The Federal Open Market Committee again reduced interest rates, setting the target between 0 and 1/4 percent.

This reduction now leaves the committee without any room to cut further, reducing its policy options to help the country cope with the recent economic issues. In the committee's statement different policy measures are referred to, such as;

- Supporting financial markets,
- Purchasing agency debt and MBSs, and
- Implementing the Term Asset-Backed Securities Loan Facility (loans to households and small companies).

The committee also states that, due to low inflationary pressures, the rate could remain low "for some time."

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