Most crucial outcome from Fed assembly is trust

December 10th, 2007 | Category: Federal Reserve, Forecasts, Economic Data

The Federal Reserve Open Market Committee (FOMC) meets tomorrow to decide what to do with interest rates. Based upon speeches by Chairman Ben Bernanke and other Fed officials, it is widely expected that the target Fed Funds Rate will be reduced by 0.25%, with an external opportunity that it will be reduced by 0.50%.

However, the most urgent outcome from the assembly is the insight that the Federal Reserve is going to stay ahead of the curve to prevent the economy from slipping into a recession. that is the biggest concern of

the market. After the final assembly, the statement implying that the Fed was done lowering rates sent the market into a tailspin, despite a 0.25% reduction in the Federal Funds Rate.

The Fed will probably not assemble the same mistake that day. Here are a few things to look for in the FOMC statement Tuesday:

Continue reading Most crucial outcome from Fed assembly is trust

Original post by Douglas S. Roberts

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