Posted on 19 December 2008
Tags: bank, bank cuts rate, bank of japan, central bank, central bank cuts, chief Japan economist, deep recession, Dow 30, Federal Reserve System, General Electric Co., Goldman Sachs, Interest Rates, Japan, Japan Central Bank, key interest rate, key policy rate, P500, S&P 500, Tetsufumi Yamakawa, The Bank of Japan, TOMOKO A. HOSAKA, United Kingdom, US Federal Reserve Bank, US Federal Reserve cut rate, Wall Street, Zero Interest Rate, zero rate policy
Is the world heading toward a zero rate policy? This question is being asked by hundreds of economists and businessmen. As evidence of deep recession is unfolding, bankers and economists are predicting that UK interest rates can hit zero any time now. The Bank of Japan’s decision to lower its key policy rate to 0.10 percent from 0.30 percent followed by US Federal Reserve Bank’s dramatic move is more proof to that fact that world is heading toward a global flat zero interest rate.
The Bank of Japan’s policy board voted 7-1 to cut the uncollateralized overnight call rate target from 0.3 percent. It was the second cut in less than two months. Japan’s interest rates have gone lower — they were effectively at zero from 2001 to 2006. TOMOKO A. HOSAKA of AFP reports
“The BOJ is in a similar situation to the Fed — the policy rate is down to a critical point, and policy conduct will inevitably shift to full-blooded quantitative easing,” said Tetsufumi Yamakawa, chief Japan economist for Goldman Sachs.
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Posted on 18 December 2008
Tags: Algiers, bank, Barack Obama, central bank, central bank's main interest rate, decreases in the Consumer Price Index, energy prices, Fed Cuts Short-Term Rates, Federal Reserve System, Interest Rates, Japan, lost decade, oil, oil prices, Organization of Petroleum Exporting Countries, policy of easy money, President, The Bank of Japan, two hundred billion dollars, U.S. central bank, united states, United States Federal Reserve, US Fedral Reserve, Washington, Zero Interest Rate, zero rate policy, Zero Short-Term Rates
The United States Federal Reserve says it will use “all available tools” to restart economic growth. The central bank’s main interest rate is now the lowest in its history. This week the Fed cut its target rate of one percent for overnight loans between banks to a target range of zero to one-fourth of one percent. The Fed based its decision on weakening economic conditions.
Federal Reserve in Washington
Americans have decreased their spending every month since July — the longest period in at least sixteen years. Unemployment grew to six and seven-tenths percent in November — the highest in fifteen years.
This week’s cut in the federal funds rate was larger than many economists had expected. The Fed also cut its rate for direct loans to banks. And it began paying interest on balances held in the Federal Reserve System.
In the past, cutting rates has been a powerful tool to lift the economy. But President-elect Barack Obama says it is not enough this time.
BARACK OBAMA: “We’re running out of traditional ammunition that’s used in a recession, which is to lower interest rates. They’re getting to be as low as they can go.”
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