Fed Cuts Rate A Half-Point -- Again

Federal Reserve Expected To Cut Rate Half Point

WASHINGTON, 2:16 p.m. EDT May 15, 2001 -- The Federal Reserve on Tuesday cut a key interest rate by a half-point.

The predicted move was aimed at giving is expected the economy a boost. It was the fifth lowering of short-term interest rates this year.

The policy-setting Federal Open Market Committee has been cutting rates since early January, in response to slowing economic growth. Many economists are looking for a rate cut of a half percentage point.

-- PHO (owennos@bigfoot.com), May 15, 2001

Answers

DJ O'Neill/FOMC Decision -2: Fed Funds Rate At 7-Year Low

WASHINGTON (Dow Jones)--U.S. Treasury Secretary Paul O'Neill said Tuesday that the decision by Federal Reserve officials Tuesday to cut the federal funds rate to a seven-year low of 4.0% was "right."

O'Neill, speaking to reporters before a hearing on Capitol Hill, refused to take questions on the Fed's action. However, O'Neill said in response to the 50 basis points rate cut, "Whatever he (Federal Reserve Chairman Alan Greenspan) did was right."

-By Dawn Kopecki, Dow Jones Newswires; 202-862-6637; Dawn.Kopecki@dowjones.com (END) DOW JONES NEWS 05-15-01 02:41 PM

-- PHO (owennos@bigfoot.com), May 15, 2001.

Yeah, but it still ain't enough. Greenspan is going to have to cut to 3% or even lower. Our present inflated Stock Market is rushing headlong, like a roaring freight train, straight into the teeth of the California (and U.S.) energy debacle.

Sadly, we've run out of time. The financial impact on world markets could be the rough eqivalent of an astroid striking the earth.

-- JackW (jpayne@webtv.net), May 15, 2001.

I can't begin to see the rationale. What is liquidity? It's creation of the ability to buy. What is the big drop in productivity, soon to be made more pronounced by the coming energy fiasco? It is the inability to provide product to be purchased.

So, why be so hell bent to provide ability to buy when there will be nothing but a contraction of things to sell. It's the formula for a train wreck all right. It looks like the train could soon go plunging, at high speed, right over the cliff.

-- Wellesley (wellesley@freport.net), May 15, 2001.

The snake oil salesman is at it again. Just what ailment is the magic elixir supposed to cure? If history is any guide, reducing short term interest rates doesn't have much affect on the type of serious economic malady which prevails. In 1929 the stock market went right on down with each decrease in short term interest. Japan is enjoying the second round of ZERO interest. It's having the same affect as the first - nothing. Isn't it about time we got rid of Greenspin and the Federal Reserve and return to real money and freedom from manipulation of the many for the benefit of the few?

-- Warren Ketler (wrkttl@earthlink.net), May 16, 2001.