The Fed cut interest rates for the third time this year by Corina Ciubotaru

The Fed cut interest rates again yesterday, and this is nothing new. It's been the third cut in three months and some say that it's preparing for a fourth in December, all to ease the economic troubles caused by the housing slump. All in all, the American economy is doing well: it rose by 3.9 percent in the last quarter, unemployment is still low and there is a good chance it won't sink into recession. Fortunately the crisis didn't much affect other economies who were worried they might have losses because of the variations of the dollar; the American currency fluctuated a bit and seems to have been calming down in the last few days, after reaching a 47-year low against the Canadian dollar. But at the same time, oil prices rose to nearly $95 a barrel and this may mean higher commodity prices that would automatically lead to inflation. The housing market isn't doing very well either: people go through more trouble to get loans than they did before the crisis so new homes are rarely bought anymore. The Fed's decision to cut interest rates again had a big impact on the financial world, and the Dow Jones rose by more than 100 points after the word as out. The Standard & Poor's 500 index containing 15 major home builders, lost 3 percent and the private sector job grew steadily in October. The economic growth is expected to reach 2 percent in the October-December period because that is when the full effects of the crisis will be better reflected in people's lives.

related story: http://news.yahoo.com/s/ap/20071031/ap_on_bi_ge/fed_interest_rates;_ylt=AqlQKFOD5.GVDVcpxF0GQq.s0NUE

by Corina Ciubotaru for PocketNews (http://pocketnews.tv)

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