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Title: How low can Bernanke go with interest rates? Post by: mismas on November 14, 2008, 05:25:13 pm Quote: "Warning that financial markets remain under "severe strain," Federal Reserve Chairman Ben Bernanke pledged Friday to work closely with other central banks to fix global financial problems and left open the door to a fresh interest rate cut to help brace the sinking U.S. economy"
If you look at the past two years, Bernanke has been cutting the rate once every while when the stock markets plunged. It did not really have much effect on anything. He would cut the rate one day after one huge plunge in capital markets, and they would keep falling as if nothing happened. So, how low can Bernanke go? The Fed's key rate is now at 1 percent. What difference does it make if it is 1% or 0.5%? I think FED's monetary policy is becoming completely without steam and useless. Title: Re: How low can Bernanke go with interest rates? Post by: bugibar on November 17, 2008, 01:48:52 pm Ya, I definitely vote for Bernanke's head, he has not done enough to revert the financial crisis. However, it is also important to say that he could not have done very much. As the price of oil was skyrocketing, so was the inflation.
He could not have gone down with interest rates very much in situation with falling dollar and accelerating inflation. |