Where in the Hell Are We Going?

| January 23, 2008 | Reply

An article in today’s New York Times announced the Federal Reserve’s decision to reduce interest rates.  The decision came after an unplanned policy meeting on Monday evening, and it reduced the Fed’s overnight lending rate by three-quarters of a percentage point, to 3.5 percent.

First, I want to make it clear that I have always been a big supporter of the Fed using interest rates to enforce economic policy.  History proves that adjusting interest rates works.  However, I question the significance of using interest rates to balance today’s economy – I just don’t believe it has the same effect as previous years.  With other economic factors such as gas prices and the war,  I don’t see interest rates replacing the much-needed consumer confidence that creates a thriving economy.  I do believe lowering interest rates can help save us from a much-feared recession in the short run, but the other factors seem to keep the economy stagnant.   

Bottom line: lowering interest rates is likely a short-term solution to a bigger problem.  

I’d like to hear your comments…   

  

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Category: Interest Rates, Investing, Real Estate

About the Author ()

Rob Myrick is a entrepreneur, web designer, and blogger who resides in Phoenix, Arizona. He works with entrepreneurs who have the need to take their product to the Internet, or who simply need marketing skills as a supporting strategy to their existing business. Rob has worked for several well-known entrepreneurs such as top blogger Katie Freiling, and also businesses such as The Startup Garage located in San Diego, CA.

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