Tuesday, September 16, 2008

Fed leaves rates unchanged

The Fed left rates unchanged at 2.00%. The decision was based on the opinion that financial markets had "increased significantly" and that recent economic growth had slowed. Also the inflation outlook remained "highly uncertain".

The Fed also noted that the down side risk to growth and the upside risk to inflation were of "significant concern".

I think they left the door open to decrease rates should market condition warrent such a move.

It also seems the a "bailout" of AIG is back on the table.

"AIG may get a loan package from Federal Reserve" Person said.

The markets have taken this news very good. Emerging Markets have rallied (a bit)and US dollar interest rate futures came off.

The Fed has also injected large sums of cash into the system the last two days and made it pretty clear, that if needed they would do more.

Good Luck and Good Currency Trading.



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