Brad L. Burge
God desires that ALL people would accept God's love and salvation through Jesus Christ. God has compelled me to share information with the world relating to the biblical seven year tribulation in order to share Truth in a deceived world.
In the beginning was the Word, and the Word was with God, and the Word was God. He was with God in the beginning. Through Him all things were made; without Him nothing was made that has been made. In Him was life, and that life was the light of men. The light shines in the darkness, but the darkness has not understood it. (John 1:1-5)
Jesus answered, "I AM the way and the truth and the life. No one comes to the Father except through me." (John 14:6)
Tuesday, March 18, 2008
A divided Federal Reserve cut interest rates by three-quarters of a percentage point, delivering less than the markets hoped for despite the magnitude of the move.
"The outlook for economic activity has weakened further. Financial markets remain under considerable stress, and the tightening of the credit conditions and the deepening of the housing contraction are likely to weigh on economic growth over the next few quarters," the Fed said in a statement accompanying the decision.
As recently as a few days ago, economists had called for only a half-percentage-point reduction in the fed funds rate. Even that would have been an aggressive move coming just weeks after officials cut the funds rate by 1.25 percentage points over an eight-day period in January.
But as the financial market crisis worsened last week and economic data disappointed, investors steadily upped their rate-cut forecasts to as high as 0.75 percentage point by the end of last week.
And after the Fed on Sunday lowered the discount rate by one-quarter point, extended $30 billion in financing to J.P. Morgan Chase & Co.to complete its takeover of Bear Stearns and announced new liquidity measures on top of others that could pump hundreds of billions of dollars into credit markets, many economists concluded that anything less than 100 basis points would disappoint markets and threaten a renewed downward spiral.
But the signs are ominous for what Fed officials call an adverse "feedback loop" in which economic and market difficulties become self-feeding. Housing remains mired in a severe slump, as evidenced by a 16-year low reading Tuesday on homebuilding permits. Back-to-back declines in employment, weak retail sales and a surprisingly large drop in factory output suggest that housing weakness is spreading to other sectors.
Further freeing the Fed's hand was a surprisingly tame consumer price report last week that showed no change in prices both overall and when food and energy prices were excluded. Inflation will surely rebound this month on the back of record-high oil and gasoline prices.
The smaller-than-expected rate cut may also signal that officials are growing uneasy about the U.S. dollar's decline against other major currencies, which has pushed up prices of commodities like oil that are priced in dollars.