The US Federal Reserve (Fed) has apparently announced an astonishing interest rate cut. The Fed has been reported as stating that its intended goal is to have a Federal Funds Rate of between 0.25% and 0%. This will hopefully be translated into lower lending for the struggling mortgage market.
The US government is now appearing to be following Japan, who had a bank rate of circa 0% in Japan’s recent recession. Japan had to deal with challenges of deflation, which will no doubt be on the minds of many US Federal Reserve employees. There are also indications that the US government may be willing to buy debt in order to help free up the markets.
As the alleged Chinese Proverb says “may you live in interesting times”: this is also known as the Chinese curse. These are truly unbelievable and certainly interesting times.
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