Wednesday, June 25, 2008
Fed Holds at 2%
Hardly a surprise but worthy of note, today the Federal Reserve held its overnight interest rates at 2%, abruptly halting a precipitous downward trend since September 2007. At that time the Fed was faced with the task reversing a sudden credit freeze throughout the financial industry. As far back as the last rate drop in late April there was talk of halting, and since then that position has only been reaffirmed, with subtle suggestions of a reversal later this year. Apparently, 2% seems adequately low to keep credit coming for those who still want to take on loans. The last time we saw rates this low, we saw the rise of the housing bubble. Now, we see an economy holding on by its fingertips as this behemoth slides into a recession.