Another bold step took by the Fed by Martina Harvanova

Such a rare situation offers seldom. The strongest, the most fearless and dynamic country of the world isn't sure about its own future. Furthermore, the case worsens as the fears of the domestic population have outgrown into real difficulties. The United States are facing a serious danger of a sharp economic plunge. The previous rate cuts done by Federal Reserve even sharpened as it took its next step in favor to avert or at least soften the blow of a recession. The Wednesday's bold action caused a cut by a half-percentage point. It was the second Fed rate cut in just over a week, and the policymakers signaled they were prepared to keep going lower if needed. The further-reaching influence came as the next unpleasant surprise to the U. S. citizens as well as another merchants and foreigners dealing on the market. Commercial banks followed the Fed by lowering their prime lending rate by the same half percentage point. It now represents 6 percent which means the lowest rate in nearly three years and affects dealing with home equity lines of credit or other loans. Another interesting fact shows that low rates have not kept home sales or prices from sliding. As the analysts state, the housing market is still looking for its bottom, foreclosures have hit record highs and banks have been swamped by billion-dollar losses. Although the cuts have calmed the fears and delighted investors, the financial markets remain fragile and the recession concerns are still intensifying. Except the terrorism the newest worries in the U. S. are called housing slump and credit crunch. And the strongest nation isn't so powerful anymore.

related story: http://www.ft.com/cms/s/0/2dfdcefa-ce9a-11dc-877a-000077b07658.html

by Martina Harvanova for PocketNews (http://pocketnews.tv)

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