S
Smart American
Guest
YUP, IF YOU ARE FAT AND HAPPY, YOU MAY HAVE TO WALK OFF THAT LARD
BECAUSE YOU CAN'T AFFORD TO DRIVE TO DAIRY QUEEN EVERY HOUR.
Ain't that a hoot? WEEEEEEEEEEEEEEEEEEEE!!!!!!!!!!!!!!!!!!!!!
WASHINGTON -- Federal Reserve policymakers at their December meeting
worried about the potential for a vicious cycle to develop in which
credit problems could worsen. That could hurt economic growth and
force the Fed to act more aggressively in cutting rates, according to
meeting minutes made public Wednesday.
"Some members noted the risk of an unfavorable feedback loop in which
credit market conditions restrained economic growth further, leading
to additional tightening of credit," the minutes said. "Such an
adverse development could require substantial further easing" of
rates, the minutes revealed.
Problems in the housing, credit and financial markets drove the Fed to
do an about-face on Dec. 11 and slice its key interest rate yet again
in the hope it would bolster an economy that was losing speed.
Fed Chairman Ben Bernanke and all but one of his colleagues agreed to
trim the Fed key rate by one-quarter percentage point to 4.25 percent,
a two-year low. The central bank ordered its key rate lowered three
times last year; the December reduction was most recent one.
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The decision to cut rates essentially marked a reversal for the
central bank, which had hinted at its previous meeting in October that
the Fed's two rate cuts probably would be enough to help the economy
survive the housing and credit stresses. But the economy's problems
intensified after that meeting, forcing the Fed to change its stance.
"Members judged that the softening in the outlook for economic growth
warranted an easing of the stance of policy at this meeting," the
minutes said. "In view of the further tightening of credit and
deterioration of financial market conditions, the stance of monetary
policy now appeared to be somewhat restrictive," the minutes said.
The 9-1 decision for a quarter-point reduction in December was opposed
by Eric Rosengren, president of the Federal Reserve Bank of Boston. He
preferred a bolder, half-percentage point cut.
In Rosengren's view, the worsening housing slump, high energy prices
and more cautious spending by individuals and businesses raised the
risk of continued economic weakness, the minutes said. "In light of
that possibility, a more decisive policy response was called for to
minimize that risk," the minutes said, explaining Rosengren's
concerns.
Wall Street, disappointed by the quarter-point cut, took a nosedive
Dec. 11; The Dow Jones plunged more than 290 points.
Fed policymakers had concerns that rising energy prices could spread
inflation through the economy. That concern figured into the Fed's
decision to cut rates by a modest one-quarter point cut in December,
the minutes suggested.
"Inflation pressures and risks remained," according to the minutes.
To bolster the economy, many economists predict the Fed will slice
rates yet again at its next meeting, on Jan. 29-30, the first
regularly scheduled gathering of 2008.
The economy is believed to have slowed sharply in the October-to-
December quarter, probably to a pace of just 1.5 percent or less,
according to analysts' projections. Economic growth in the first three
months of 2008 also is expected to be weak.
Economists' big worry is that individuals will reduce spending and
businesses will become reluctant to hire workers, throwing the economy
into a tailspin. The odds of a recession have grown, with some
economists putting it at just under 50 percent.
At the December meeting, Fed policymakers suggested that all the
housing, credit and financial problems have increased economic
uncertainty. That has made it more difficult for the Fed to assess the
country's economic outlook and give clear signals about its next move.
"The committee agreed on the need to remain exceptionally alert to
economic and financial developments and their effects on the outlook,
and members would be prepared to adjust the stance of monetary policy
if prospects for economic growth or inflation were to worsen," the
minutes said.
If economic conditions were to improve more rapidly than expected, "a
reversal of some of the rate cuts might be appropriate," according to
the record of the meeting.
Although Fed policymakers agreed in December that rates must be cut
yet again, "they also recognized that the situation was quite fluid
and the economic outlook unusually uncertain," the minutes said.
BECAUSE YOU CAN'T AFFORD TO DRIVE TO DAIRY QUEEN EVERY HOUR.
Ain't that a hoot? WEEEEEEEEEEEEEEEEEEEE!!!!!!!!!!!!!!!!!!!!!
WASHINGTON -- Federal Reserve policymakers at their December meeting
worried about the potential for a vicious cycle to develop in which
credit problems could worsen. That could hurt economic growth and
force the Fed to act more aggressively in cutting rates, according to
meeting minutes made public Wednesday.
"Some members noted the risk of an unfavorable feedback loop in which
credit market conditions restrained economic growth further, leading
to additional tightening of credit," the minutes said. "Such an
adverse development could require substantial further easing" of
rates, the minutes revealed.
Problems in the housing, credit and financial markets drove the Fed to
do an about-face on Dec. 11 and slice its key interest rate yet again
in the hope it would bolster an economy that was losing speed.
Fed Chairman Ben Bernanke and all but one of his colleagues agreed to
trim the Fed key rate by one-quarter percentage point to 4.25 percent,
a two-year low. The central bank ordered its key rate lowered three
times last year; the December reduction was most recent one.
Top NewsTop Posts
Business: Dan Solin: Smart Advice for the HuffPost Investor: Warren
Buffet on Index Funds, the Truth on Investment Professionals, and the
Falling Dollar
Politics: Arianna Huffington: HuffPost's "The Bush Years" Posters: A
Powerful Political Stocking Stuffer
Entertainment: Jon Robin Baitz: Leaving Los Angeles (Part Two: Love)
Living: Catherine Specter: Already Attached But Still Have A Wandering
Eye? Wander This
Media: David Fiderer: Tucker Carlson: Elizabeth Edwards' House
Reflects "Absolutely Some Kind of Psychological Condition."
Media: Dave's Stacked First Week Back: Williams, Maher, Trump
Business: Oil Prices Soar To $100 A Barrel
Living: Cocaine Vaccine Developed For Drug Treatment
Entertainment: In Depth: "Indiana Jones And The Kingdom Of The Crystal
Skull"
Politics: Watch: Meredith Viera Gets Tough With Hillary, Questions
Bosnia Trip With Sinbad
The decision to cut rates essentially marked a reversal for the
central bank, which had hinted at its previous meeting in October that
the Fed's two rate cuts probably would be enough to help the economy
survive the housing and credit stresses. But the economy's problems
intensified after that meeting, forcing the Fed to change its stance.
"Members judged that the softening in the outlook for economic growth
warranted an easing of the stance of policy at this meeting," the
minutes said. "In view of the further tightening of credit and
deterioration of financial market conditions, the stance of monetary
policy now appeared to be somewhat restrictive," the minutes said.
The 9-1 decision for a quarter-point reduction in December was opposed
by Eric Rosengren, president of the Federal Reserve Bank of Boston. He
preferred a bolder, half-percentage point cut.
In Rosengren's view, the worsening housing slump, high energy prices
and more cautious spending by individuals and businesses raised the
risk of continued economic weakness, the minutes said. "In light of
that possibility, a more decisive policy response was called for to
minimize that risk," the minutes said, explaining Rosengren's
concerns.
Wall Street, disappointed by the quarter-point cut, took a nosedive
Dec. 11; The Dow Jones plunged more than 290 points.
Fed policymakers had concerns that rising energy prices could spread
inflation through the economy. That concern figured into the Fed's
decision to cut rates by a modest one-quarter point cut in December,
the minutes suggested.
"Inflation pressures and risks remained," according to the minutes.
To bolster the economy, many economists predict the Fed will slice
rates yet again at its next meeting, on Jan. 29-30, the first
regularly scheduled gathering of 2008.
The economy is believed to have slowed sharply in the October-to-
December quarter, probably to a pace of just 1.5 percent or less,
according to analysts' projections. Economic growth in the first three
months of 2008 also is expected to be weak.
Economists' big worry is that individuals will reduce spending and
businesses will become reluctant to hire workers, throwing the economy
into a tailspin. The odds of a recession have grown, with some
economists putting it at just under 50 percent.
At the December meeting, Fed policymakers suggested that all the
housing, credit and financial problems have increased economic
uncertainty. That has made it more difficult for the Fed to assess the
country's economic outlook and give clear signals about its next move.
"The committee agreed on the need to remain exceptionally alert to
economic and financial developments and their effects on the outlook,
and members would be prepared to adjust the stance of monetary policy
if prospects for economic growth or inflation were to worsen," the
minutes said.
If economic conditions were to improve more rapidly than expected, "a
reversal of some of the rate cuts might be appropriate," according to
the record of the meeting.
Although Fed policymakers agreed in December that rates must be cut
yet again, "they also recognized that the situation was quite fluid
and the economic outlook unusually uncertain," the minutes said.
