Friday, August 17, 2007

It's a start..............

This is a start, but I don't understand the stubbornness of not lowering the fed funds rate.........

Fed OKs Reducing Discount Rate on Loans

Friday August 17, 9:52 am ET

Federal Reserve Approves Half-Percentage Point Cut in Discount Rate on Loans to Banks
WASHINGTON (AP) -- The Federal Reserve approved a half-percentage point cut in its discount rate on loans to banks Friday, a dramatic move designed to stabilize financial markets roiled by a widening credit crisis.

The action had an immediate positive impact, sending stocks soaring on Friday right at the opening bell. The Dow Jones industrial average surged by more 300 points at the start of trading.

The decision means that the discount rate, the interest rate that the Fed charges to make direct loans to banks, will be lowered to 5.75 percent, down from 6.25 percent.

The Fed did not change its target for the more important federal funds rate, which has remained at 5.25 percent for more than a year. Friday's move was not expected to have an immediate impact on consumer borrowing...............

Friday August 17, 9:52 am ET
By Martin Crutsinger, AP Economics Writer

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