Federal Reserve officials have pared their outlook for economic growth through 2009 to minimal levels and are prepared to cut interest rates further, while concern has risen that a deflationary spiral may take hold.
WRAPUP 1-Fed signals ready to cut rates amid glum outlook | Markets | Markets News | Reuters.
In an update to the previous post about falling prices, this article indicates that the Fed will likely lower interst rates. This should spur investment in the economy at a time when the word ‘recession’ is looming over head. As I speculated in my earlier post, the Fed is worried about continually falling prices which would be a bad sign for the economy.
Let’s make this clear quick, relatively cheap prices are good (ie buying something on sale), absolute continual price decline is not good.
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