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Regorium · 09-18-2007, 03:10 PM

With the Fed's move today, US stocks shot up almost 3%. However, I am still unable to put my head around how much power the Feds have on the economy. Every media report I have read have shown that the US economy is extremely weak at the moment, from increasing foreclosures, job losses, to the weak currency and more. How can the Feds just basically tell everyone "The economy is fine!" and then people buy?

I've always thought that the market should be able to correct itself - it is obviously weak (through its own poor decisions), and it would've taken some time for it to go through the correction and fix itself. The Fed's forcing the economy to "grow" just seems so baseless to me.

Can anyone provide some insight into this move? What would've been the reprecussions of leaving this interest rate stable and allowing the markets to correct?

09-18-2007, 03:10 PM	#1
Regorium First Line Centre Join Date: Apr 2006 Location: Calgary Exp:	US monetary policy With the Fed's move today, US stocks shot up almost 3%. However, I am still unable to put my head around how much power the Feds have on the economy. Every media report I have read have shown that the US economy is extremely weak at the moment, from increasing foreclosures, job losses, to the weak currency and more. How can the Feds just basically tell everyone "The economy is fine!" and then people buy? I've always thought that the market should be able to correct itself - it is obviously weak (through its own poor decisions), and it would've taken some time for it to go through the correction and fix itself. The Fed's forcing the economy to "grow" just seems so baseless to me. Can anyone provide some insight into this move? What would've been the reprecussions of leaving this interest rate stable and allowing the markets to correct?