Fed: The Zero Option
The Federal Reserve is expected to cut rates again at the end of a two-day policy meeting next Tuesday and could be on the road to zero, according to some analysts.
That makes interest rates this side of the pond look positively tempting (for now).
The Fed has so far cut rates from 5.25% to 1% in just 15 months.
In a key speech on Dec. 1, Fed chief Ben Bernanke promised vigorous action to combat the economic downturn. Analysts believe that means a minimum cut on Dec. 16 of a half-a percentage point to 0.5%.
For some Fed watchers, "vigorous action" translates into a policy that includea cutting the funds rate to the lowest feasible level and more "nontraditional" steps like buying more debt to lower interest rates and unclog markets.
That makes interest rates this side of the pond look positively tempting (for now).
The Fed has so far cut rates from 5.25% to 1% in just 15 months.
In a key speech on Dec. 1, Fed chief Ben Bernanke promised vigorous action to combat the economic downturn. Analysts believe that means a minimum cut on Dec. 16 of a half-a percentage point to 0.5%.
For some Fed watchers, "vigorous action" translates into a policy that includea cutting the funds rate to the lowest feasible level and more "nontraditional" steps like buying more debt to lower interest rates and unclog markets.
