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We expect to have our upgraded
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 Business
News Headlines to Jan 16 2008
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Tuesday's stories and links from Jan 17 2008
Fed makes emergency rate
cut of 0.75% to 3.50%; Sell-off resumes in Europe; US markets
plunge at opening in New York - 2.35 pm
The interest rate-setting Federal
Open Market Committee (FOMC) of the US Federal Reserve today made an
emergency interest rate cut in advance of the opening of US markets,
which were expected to fall sharply following a global stocks' rout
on fears of a US recession.
The FOMC cut the federal funds rate
by 0.75% to 3.50%, which compares with the European Central Bank's
benchmark rate of 4%.
Today's cut was
the biggest individual one since October 1984.
In London, the FTSE 100 fell after a rise
of 1.55% and is now adown 0.27% ;
the German Dax cut losses and was down 0.77% but is now lower
by 1.99% and France's CAC 40 is down having 0.87% having risen 1.09%
after the Fed announcement.
In Dublin, the ISEQ jumped almost 2%
to a rise of over 3.4% but is back at a plus 1.70%.
Investors simply were selling into
the rallies to book profits as the economic outlook remains bleak.
At 2:35 pm , US markets have plunged
at the opening. Dow is currently down 451 points, 3.72%; the Nasdaq
has dropped more that 5% and the S&P is off 3.51%.
National benchmarks - Europe
Irish Share Prices
Euribor Rates
Live US Market
Indices - the US markets opened at 2:30 pm Irish time.
FOMC Statement
The Federal
Open Market Committee has decided to lower
its target for the federal funds rate 75
basis points to 3-1/2 percent.
The
Committee took this action in view of a
weakening of the economic outlook and
increasing downside risks to growth. While
strains in short-term funding markets have
eased somewhat, broader financial market
conditions have continued to deteriorate and
credit has tightened further for some
businesses and households. Moreover,
incoming information indicates a deepening
of the housing contraction as well as some
softening in labor markets.
The
Committee expects inflation to moderate in
coming quarters, but it will be necessary to
continue to monitor inflation developments
carefully.
Appreciable downside risks to growth
remain. The Committee will continue to
assess the effects of financial and other
developments on economic prospects and will
act in a timely manner as needed to address
those risks.
Voting for
the FOMC monetary policy action were: Ben S.
Bernanke, Chairman; Timothy F. Geithner,
Vice Chairman; Charles L. Evans; Thomas M.
Hoenig; Donald L. Kohn; Randall S. Kroszner;
Eric S. Rosengren; and Kevin M. Warsh.
Voting against was William Poole, who did
not believe that current conditions
justified policy action before the regularly
scheduled meeting next week. Absent and not
voting was Frederic S. Mishkin.
In a
related action, the Board of Governors
approved a 75-basis-point decrease in the
discount rate to 4 percent. In taking this
action, the Board approved the requests
submitted by the Boards of Directors of the
Federal Reserve Banks of Chicago and
Minneapolis
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