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Politics : High Tolerance Plasticity

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To: stockman_scott who wrote (8983)10/4/2001 1:05:44 AM
From: TimF  Read Replies (1) of 23153
 
. Myth 1: The Fed is running out of ammunition. This myth is propagated by pessimists who want you to believe that the Fed can't do much more for the economy now that the funds rate is down to 2.50%. But by our tally, that leaves 250 bp more of rate cuts in the arsenal.

And even if rates couldn't or wouldn't be cut past some level wouldn't low rates provide a stimulus to the economy even if they are not going down? A steady 2.5% rate is more of a stimulus then a 7.0% rate would be even if it just dropped from 10%, IMO.

Tim
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