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Rate cutting palooza
European Central Banks cut rates
The Bank of England’s Monetary Policy Committee voted to drop its key lending rate by a full percentage point to 2%. The bank last cut its benchmark rate to that level in 1939, where it stayed until it was hiked to 2.5% in 1951.
"In the United Kingdom, business surveys have weakened further and suggest that the downturn has gathered pace," the Monetary Policy Committee said in a statement announcing the move.
The European Central Bank’s Governing Council slashed its key lending rate by 75 basis points, or three-quarters of a percentage point, to 2.5%. The…
Fed Policymakers Look to Juggle Inflation, Stagnation
The U.S. Federal Reserve faces a tough challenge as it kicks off a two-day policymaking meeting tomorrow (Tuesday): It probably needs to start raising interest rates to prop up the U.S. dollar and offset a major escalation in inflationary pressures; but the economy needs low interest rates if it’s to maintain its anemic growth rate.
After one of the Fed’s most aggressive rate-cutting campaigns ever slashed short-term interest rates from 5.25% in mid-September to 2.0% now, experts now expect the central bank to reverse course. And this week’s two-day meeting of the policymaking Federal Open Market Committee (FOMC) represents the first…
23Jun2008 | Money Morning | Comments Off | Continued
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