

FOMC cuts surprise 75 bps - sebg

FOMC cuts from 4.25 to 3.50.
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mixmax
Isn't this just a short term solution ?

In the longer run it will raise inflation, especially with the unemployment
rates being as low as they are.

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sebg
Definitely a short term solution. However, Fed has two prong mandate.
Unemployment and inflation. In the short run they can try to affect
unemployment by cutting rates as the economy goes into recession. In the long
run they will have to pay attention to the inflation figures. Given the recent
write downs by financial institutions, the way the equity markets outside of
the US are behaving, and the last unemployment number, it makes sense for the
Fed to try to help out the economy in the short run.

