Tuesday, December 16, 2008

I'm pretty sure zero (0) is a lower bound

Fed cuts target for key rate to record low
AP, 16 Dec 2008
WASHINGTON – The Federal Reserve has cut its target for a key interest rate to the lowest level on record and pledged to use "all available tools" to combat a severe financial crisis and prolonged recession.

The central bank on Tuesday said it had reduced the federal funds rate, the interest that banks charge each other, to a range of zero to 0.25 percent. That is down from the 1 percent target rate in effect since the last meeting in October. Many analysts had expected the Fed to make a smaller cut to 0.5 percent.



0.25%!

I suppose it is possible to go negative - making borrowing money a money-making proposition!

Have a nice day.

1 comment:

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