Fed Rate Cut By 0.5 pts, Federal Reserve Announcement Lowers Interest Rate to 3.0 pct

The Federal Reserve has just announced a Fed rate cut of half a point to 3 pct.

The announcement was made by Federal Reserve Chairman Ben Bernanke after the monthly Fed meeting due to increasing pressure caused by the meltdown in the stock markets across the globe.

This financial turmoil has caused considerable damage to the markets and major companies are in serious trouble with mortgage and home loan stocks in trouble as well as bond insurers such as Ambac. The stock markets have been in decline due to the credit and mortgage crisis and there were fears of 1987 style crash looming.

This Fed rate cut is designed to give some relief to the financial markets but there are questions over whether it will solve the financial crisis in the longer term. The Fed announcement comes just days after they cut the rates by 0.75 in an emergency Federal Rate Cut.

Market analyst Sam Kirtley of The Gold Prices Newsletter doesn’t think that the Fed rate cut is enough to stop what he believes is a severe recession coming to the US, “Interest rate cuts will not stop the coming major recession and continuing financial crisis. The problem is not a one of liquidity, it is one of solvency. A Fed rate cut, will only get the Federal Reserve some more time. We see this turmoil getting much worse before it gets better and so we are urging our subscribers to invest in gold and gold stocks to protect their wealth and profit from this coming crash.”

Do you think this Fed rate cut of 0.50 points is enough?

What can Bernanke and the Federal Reserve do to stop this crisis?

Or is a crisis even coming? Do you think these financial, mortgage and credit worries will blow away?

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