Spotlight
Thursday, 01 May
Ben Bernanke
Federal Reserve chairman Ben Bernanke slashed short-term interest rates yet again this Wednesday. Though this represents the seventh rate cut since September, Bernanke hinted that it may be the last for the foreseeable future, reports Steven R. Weisman in today's New York Times. The Federal Reserve defended its decision to lower the federal funds rate, which the fed charges banks for overnight loans, from 2.25 percent to 2 percent as an essential move in its continuing effort to counter the effects of the "ailing housing sector and the 'considerable stress' shadowing financial markets," writes Weisman.
The Wall Street Journal calls the fed out for taking the easy route: "When in doubt, the current fed always cuts interest rates," a strategy the Journal sees as erring "on the side of easier money."
Due to the continuing inflation of energy and food prices, economists have been nearly unanimous in predicting that the central bank's latest rate cut would also be its last. But the Times UK points out that Bernanke only offered "veiled hints about their intentions ... The overall message seemed to be that [the Fed] is less inclined to cut rates in coming months — but wants to give no firm assurances that it will not do so."
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