The Administration May Acutally Be Saying Goodbye To The Free Marketplace

By Author: Jennifer McClelland
Total Articles: 4762
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Well.maybe not, but it looks like the Federal Reserve may be ceasing any new efforts to revive the economy at its meeting this week. According to economists, Chairman Ben Bernanke and his colleagues do not desire to go overboard with the stimulus remedy and that motivating the economy through the Fed might stir up the flames of inflation soon after, so the Fed is expected not to make any additional moves this week.

Through the past year, the Fed has completed everything it could do to attempt to help stimulate the economy as well as injecting $1.2 trillion into the financial system in an effort to lessen interest rates. The lesser interest rates were meant to get consumer spending up.

The Fed is also expected to hold the key lending rate to banks at the history low of near zero percent. It has alleged in the past that it will keep the rate low for “an extended period.” Economists believe that the rate will stay sandwiched between 0 and 25% awaiting sometime in 2010.

It is appearing increasingly like some of the things that the state has done to help the market has had a bit of ...
... an outcome…after all it was just in January when the initial stimulus was accepted and took effect. Since that time, home prices have stopped waning as quickly and are actually begining to settle down in a lot of places, and in the last month, buyer spending has amplified and the jobless rate has also began to slow down. Some analysts feel that the financial system is falling, but at a much lesser rate than the closing quarter of 2008. The April-June quarter is stuck between a 1 and 3% fall, while the last quarter of 2008 was 6.3%.

Certainly, some of the difficulty is that we will not recognize whether the economy would have improved as quickly without the government interfering as much. A large number of the state agencies we at present have in place were putin position to keep a depression like the one seen in 1929 from going on again.

A dilemma that is going on now is that mortgage rates have began to jump again, and while mortgage rates have to go back up, presently the housing marketplace is still hurting and home buyers are still a bit sparse. To assist, the Fed may come to a decision to start buying more mortgage backed securities as well as state debt to help drive the rates of mortgages down.
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