Fed Discount Rate Lowered: Your Thoughts On 5.75pct Federal Funds Rate

Following the news that the Fed discount rate has been lowered half a percentage point to 5.75 pct from 6.25 pct, we consider whether this is enough to save the financial markets.

A lower Federal funds rate does mean that the credit crunch will ease slightly, but do you think longer term interest rates need to be lowered?

Although lowering the Federal Reserve discount rate is a good start to helping the financial market, doesn’t more need to be done?

“It’s conceivable that the Fed’s actions today could go a long way toward restoring liquidity to the markets,” said David Greenlaw, an economist for Morgan Stanley.

So perhaps this cut in the Fed discount rate is enough. Markets did open higher this morning but those gains that were made due to the Federal funds rate cut are being eroded away.

It may take more than a cut in the Federal Reserve discount rate to save the market.

What do you think?

Will the Fed discount rate cut be enough?

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