2008 Inflation Slowest in 50 Years on Oil Prices, Economy

Central bank expected to tackle deflation danger

(NEWSER) - The Federal Reserve meets today to decide what medicine the wheezing American economy needs, and world markets will be keenly watching for the outcome. With no new stimulus spending from Congress likely, the central bank is the only body poised to react to signs that the recovery is running out of steam. Many economists expect the Fed will switch focus from preventing inflation to heading off deflation, the New York Times reports. More»

Fed chair leaves door open, but emphasizes reform

(AP) - Ben Bernanke today left the door open to higher interest rates, saying the increase might be needed to prevent new speculative investment bubbles from forming. But for critics who blame the Fed for feeding that speculative housing boom by holding interest rates too low for too long after the 2001 recession, Bernanke says that stronger regulation is the best way to prevent financial speculation from getting out of hand and throwing the economy into a new crisis. More»

With rates at 0%, politically unsavory buying program only tool left

(NEWSER) - The Fed is almost sure to leave the federal funds rate alone today, mostly because, at about 0%, it literally can’t go any lower. So with deflation still looming, what’s Ben Bernanke to do? One Goldman Sachs analyst says the Fed needs to shave the equivalent of 8 more points off the target rate by 2010. Since Bernanke can’t cut, the analyst suggests a shopping spree, the Wall Street Journal reports. More»

(NEWSER) - The Federal Reserve anticipates the recession will continue through 2009 despite its recent rate slash and other planned “nontraditional policies,” the Wall Street Journal reports. Minutes of the Fed's December 15-16 meeting, at which it cut rates to nearly zero, indicate a deep pessimism about the economy. Officials expect the unemployment rate to keep rising as the GDP contracts. More»

Analysts predict Japan-style cuts in interest rates

(NEWSER) - Yesterday Ben Bernanke cut the federal funds rate to an ectomorphic 1%—but the Fed might not be done yet. More and more analysts are predicting that the central bank will have to cut rates all the way to zero if it wants to get the economy moving again. But don't get too excited, writes the New York Times: A 0% funds rate would apply only to interbank lending, and wouldn't mean free money for consumers. More»