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How Low Will Bernanke Go?

Posted Jan 24, 08 9:29 CST in Business 

(Newser) – The Fed’s emergency three-quarter percentage-point cut Tuesday to the short-term interest rate was a boon to US markets, but whether the Fed will go lower in its interest-rate lambada remains to be seen. Most analysts expect a half-point cut, to 3%, at the Fed's meeting Wednesday, reports the Wall Street Journal; some see the possibility of another three-quarters. 

“The Fed is in catch-up mode,” said one. A cut of either size would make the Fed's combined moves the steepest cut since 1982. Experts predict a Fed rate as low as 2.25%, depending on soon-to-be-released economic growth figures, but warn the Fed won’t drop as far as in the early 2000s, when the 1% rate contributed to creating a housing bubble.
Source: Wall Street Journal

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Federal Reserve Board Chairman, Ben Bernanke, speaks in Washington in this Nov. 14, 2007 file photo. (AP Photo/Caleb Jones, File)   (Associated Press)
Federal Reserve Board Chairman Ben Bernanke pauses while discussing the near-term economic outlook during testimony before the House Budget Committee on Capitol Hill in Washington in this Thursday, Jan....   (Associated Press)
Federal Reserve Board Chairman Ben Bernanke discusses the economic outlook while testifying before the Congressional Joint Economic Committee on Capitol Hill in Washington in this Nov. 8, 2007, file photo....   (Associated Press)
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