The announcement by Ben Bernanke after the Fed meeting has come after increasing pressure caused by the recent credit crunch.
This financial turmoil has caused considerable damage to the markets and major companies are in serious trouble with mortgage and home loan stocks such as Northern Rock and Countrywide Financial losing billions in market value from severe decline in their stock prices.
The Fed rate cut should offer some relief to the financial markets but will it solve the financial crisis longer term?
Market analyst Sam Kirtley of The Gold Prices Newsletter doesn’t think that the Fed rate cut is enough, “Cutting interest rates will not stop the coming major recession and continuing credit crisis. Even this Fed rate cut, will only buy Bernanke some time. We see this turmoil getting much worse before it gets better and so we are urging our subscribers to invest in gold and gold stocks to protect their wealth and profit from this coming crash.”
Do you think this Fed rate cut of half a point is enough? If no what can Bernanke and the Fed do to stop this crisis?
Or is the crisis even coming? Do you think these financial and credit worries will blow away? - Source: From Product Reviews Net Blog
Fed Meeting and Rate Cut
I am not sure if the Fed rate cut will help the financial markets and the housing problems because we don't know how deep is the problem and at what stage we are. By the way CNN reports that "Oil prices crept into new high territory above $81 a barrel as futures traders wagered that a Fed rate cut would stimulate energy demand." The survey on this site says that 56 percent of people believe that Fed Rate Cut will not help the housing crisis.