18 March 2008

Anyone want to jump ship?

Federal Reserve slashes US rates
The Federal Reserve has cut US interest rates sharply in a bid to restore confidence to nervous financial markets and boost the ailing economy.

The central bank lowered rates to 2.25% from 3%, but the cut was smaller than financial markets had been expecting.

The Fed has taken strong action this week to avert a financial panic after investment bank Bear Stearns was forced into a fire sale to avoid collapse.

Many economists believe the US economy is already in a recession.

US Treasury Secretary Henry Paulson admitted earlier on Wednesday that the US economy was facing a "sharp decline" at the moment, but hoped for a recovery later in the year.

The Fed has lowered rates five times since mid-September in a bid to boost the economy, which is reeling from credit crisis that was triggered by a slump in the US housing market.

"Today's policy action, combined with those taken earlier, including measures to foster market liquidity, should help to promote moderate growth over time and to mitigate the risks to economic activity," the Federal Reserve said.

We are so fucked. Anyone want to move to New Zealand with me?


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