Quote:
Originally Posted by pokerjoe  As the resident MW psycho-pseudo-econ dude, I feel compelled:
The Fed, fearing a stock market drop, takes 3/4 of a point off its funds rate last week.
Do they, and we, not know that ZERO is coming? |
From Professor Krugman: Depression Economics Returns (my editing):
IWe are well into the realm of what I call depression economics.
To see what I’m talking about, consider the implications of the latest piece of terrible economic news: Thursday’s report on new claims for unemployment insurance. Bad as this report was, viewed in isolation it might not seem catastrophic.
But
the standard policy response to a weak economy is a cut in the federal funds rate. Today, it isn’t available: the effective federal funds rate has averaged less than 0.3 percent in recent days. Basically, there’s nothing left to cut.