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In a distressing revelation, the Federal Reserve anticipates three rate cuts next year, acknowledging the challenge posed by persistent inflation. The economic engine falters as demand plummets for homes, vehicles, and goods, painting a grim picture of financial distress among Americans. Once deemed a lifeline, credit cards are now avoided, sinking below pre-pandemic levels. Soaring default rates further darken the economic landscape. Powell’s unexpected dovish shift marks a stark departure from his recent hawkish stance, signaling an alarming shift. The Fed’s surrender to inflation raises concerns, leaving a trail of confusion and uncertainty.

Be careful what you wish for, as the looming rate cut anticipated at the Fed’s March 20th meeting might not bring the desired outcome. History suggests that the first cut often aligns with a market decline, typically indicative of a slowing economy or crisis. Concerns are surfacing, especially in California, where tax receipts have plummeted by 25%, raising questions about an impending recession. The Legislative Analyst’s Office (LAO) report indicates a downturn in 2022, supported by the triggering of the Sahm Rule, even though applying it to states sparks controversy.

The Federal Reserve on Wednesday lowered interest rates for the first time since the Great Recession in 2008 to help stave off the possibility of an economic downturn. Policymakers led by Fed Chairman Jerome Powell voted 8-2 in favor of a small cut in the federal funds rate, and recommitted to their promise to "act as appropriate" to sustain the country's longest economic expansion in history. Interest rates, which affect the cost of borrowing for credit cards and mortgages, are now set to hover between 2% and 2.25%. The rate cut follows months of pressure from President Donald Trump, who...

The Bank of Israel lowered its benchmark interest rate on Monday to an all-time low of 0.1 percent on Monday. The move came as a surprise, after 11 of 12 economists polled by Reuters had expected the central bank to stand pat. The central bank cut the rate to signal its determination to push back against the negative inflation holding down the market towards its intended annual target of one to three percent. Lowering the interest rate theoretically leads to an increase in demand within the market and helps increase prices towards the inflation target which the Bank of Israel...

Drastic interest rate cut soon By Hao Zhou (China Daily) Updated: 2009-01-10 07:49 China's central bank may slash the benchmark interest rate "radically" in the coming months as the country's inflationary pressure is expected to ease further, economists said. A report by the Bank of China (BOC) International (China) Ltd said the People's Bank of China may further cut the benchmark one-year deposit rate by 81 basis points and the lending rate by 108 basis points in the coming three to four months. The report said the nearly zero interest rate and weak market confidence in the US has created...

Wed Nov 26, 2008 5:38am EST (Adds details, reaction) By Zhou Xin and Eadie Chen BEIJING, Nov 26 (Reuters) - China slashed interest rates on Wednesday for the fourth time since mid-September, dramatically stepping up the pace of monetary easing to cushion the blow of global financial turmoil on the world's fourth-largest economy. The People's Bank of China (PBOC) cut benchmark rates for one-year loans and deposits by 1.08 percentage points, lowering the cost of one-year borrowing to 5.58 percent and the rate on 12-month certificates of deposit to 2.52 percent. "China is out to save itself here. The rest...

Regional stocks jump on central banks' response China, Taiwan, Hong Kong cut rates; Seoul, Singapore, Fed agree to swaps By V. Phani Kumar, MarketWatch Last update: 12:46 a.m. EDT Oct. 30, 2008 HONG KONG (MarketWatch) -- Asian markets surged Thursday as investors went on a buying spree after central banks responded strongly to slowing economic growth and turmoil in financial markets by reducing interest rates or boosting liquidity of U.S. dollars. South Korean stocks rocketed and Singaporean shares extended gains into a third straight session after their central banks opened a swap facility with the U.S. Federal Reserve that will...

China cuts interest rates again as growth cools The People's Bank of China cut its main interest rate again today without any warning or explanation. By Malcolm Moore in Shanghai Last Updated: 12:54PM GMT 29 Oct 2008 It was the third time that the Chinese central bank has cut rates in the past two months. It informed banks that the key one-year lending rate will fall to 6.66pc from 6.93pc, effective from Thursday. The country's policy makers were the first to act after the collapse of Lehman Brothers helped deepen the worst financial crisis since the 1930s. China slashed its...

Money market stress intensifies By Michael Mackenzie in New York Published: October 8 2008 19:44 | Last updated: October 8 2008 19:44 Stress across money markets intensified on Wednesday despite the unprecedented round of co-ordinated interest rate cuts by central banks aimed at helping banks gain access to funds. In recent days, central banks have pumped vast amounts of liquidity into the short-term lending markets, only for banks to hoard the cash and not lend to other banks. As well as the rate cuts, the US Treasury tried to alleviate lending problems in government bond markets by making more of...

Asian central banks cut rates By Kathrin Hille in Taipei, Tom Mitchell in Hong Kong and Song Jung-a in Seoul Published: October 9 2008 02:27 | Last updated: October 9 2008 04:16 Central banks in Taiwan, South Korea and Hong Kong cut interest rates on Thursday in steps that closely follow America’s and Europe’s policy response to the financial crisis. In an extraordinary policy meeting Thursday morning just two weeks after its last rate cut, which had reversed course following a four-year rate raising cycle, Taiwan’s Central Bank of China lowered the benchmark discount rate to 3.25 per cent from...

Gold rallies anew on inflation fears amid rate cuts By Moming Zhou, MarketWatch Last update: 4:15 p.m. EDT Oct. 8, 2008 SAN FRANCISCO (MarketWatch) -- Gold futures closed above $900 per ounce Wednesday to tally a three-session rise of 8.8% as investors sought refuge against inflation after major central banks around the world cut interest rates in concert. The Federal Reserve, European Central Bank and four other central banks lowered interest rates in a coordinated effort to combat world's deepening financial turmoil. "Coordinated central bank aggressive interest rate cuts should lead to gold surging in value in the coming months"...

FTSE fails to hold rate cut gains By Michael Hunter Published: October 8 2008 08:41 | Last updated: October 8 2008 16:11 London equities failed to hold gains inspired by a co-ordinated emergency interest rate cut of 50 basis points from the world’s leading central banks on Wednesday, with resource stocks exerting pressure on the index amid concern about the outlook for global economic growth. The Bank of England, the US Federal Reserve and the European Central Bank as well as the central banks of Canada, Sweden and Switzerland reduced their key lending rates in a co-ordinated move to ease...

World's leading economies -- led by U.S. Federal Reserve and European Central Bank -- announce half point cut in interest rates.

ECB sees crisis of "enormous proportions" as Spain creates mortgage rescue fund The European Central Bank has dramatically changed its tune over the last twenty-four hours as the credit freeze worsens, acknowledging for the first time that the world faces the gravest crisis since the Great Depression. By Ambrose Evans-Pritchard Last Updated: 8:34PM BST 07 Oct 2008 A string of governors from across the eurozone have today issued grim warnings in what seemed a coordinated move to prepare the markets for interest rate cuts, perhaps within days. Guy Quaden, Belgium’s ECB member, said the violent storm ravaging Europe’s banking system...

Two Fed officials push back against rate-cut hopes 3 Oct, 2008, 1054 hrs IST, REUTERS BLOOMINGTON: Two top Federal Reserve officials pushed back against market expectations of a big US interest-rate cut later this month, saying on Thursday that monetary policy was already easy and inflation still a concern. St. Louis Federal Reserve Bank President James Bullard and Kansas City Fed chief Thomas Hoenig both acknowledged the US economy was likely to face some rough times ahead, but showed clear unease with the idea of lower rates. "I think lowering interest rates right now, maybe, is not the right response,"...

Fed officials considering further rate cuts: report October 2, 2008 9:11 AM ET Reuters TOKYO (Reuters) - Federal Reserve officials are weighing further interest rate cuts, even if Congress approves a $700 billion financial industry bailout, because of a worsening economic outlook, the Wall Street Journal said on Thursday. A rate cut is still far from certain, partly because of inflation worries, the WSJ said in an unsourced report on its website. "The Fed's willingness to consider additional rate cuts marks a turnaround from the past few months, when soaring food and energy prices turned its attention to inflation risks,"...

China cuts rates, lowers reserve ratioBy Xin Zhiming (China Daily) Updated: 2008-09-16 07:02 China's central bank Monday cut the cost of bank loans, the first time since 2002, and lowered the proportion of money lenders must have as reserves, the first such move in nine years, to keep the economy from sliding further. The benchmark lending rate will be lowered by 0.27 percentage point to 7.20 percent from Tuesday. However, benchmark deposit rates remain unchanged with the one-year rate to be kept at 4.14 percent, a proof that the central bankers are keeping an eye on inflation.

Saudis press United States to put an end to rate cuts American Account Irwin Stelzer SO the Federal Reserve Board’s monetary policy committee (technically, the Federal Open Market Committee, or FOMC) has decided to leave interest rates as they are - which is far less important than how it arrived at that decision. What follows is a combination of hard fact and my own surmise, mixed together so as to shield the usual highly placed, reliable source. There is something called “the Fed family”. It’s not as shady as a mafia family, but far more powerful. Members include chairman Ben...

Eurozone warned on impact of credit crisis By Ralph Atkins in Frankfurt Published: April 10 2008 12:45 | Last updated: April 10 2008 20:13 The global financial turmoil could last longer and have a broader impact on the eurozone economy than previously expected, the European Central Bank warned onThursday, even as it underlined its hard-line stance on inflation by leaving interest rates unchanged.Comments by Jean-Claude Trichet, ECB president, highlighted the risks and uncertainty the Frankfurt-based institution sees surrounding the eurozone economic outlook. But with inflation at 3.5 per cent, the highest for almost 16 years, his tone after the ECB’s...

Japan inflation hits decade high, BOJ seen unmoved Thu Mar 27, 2008 9:30pm EDT By Leika Kihara TOKYO (Reuters) - Japanese annual inflation hit a decade-high 1.0 percent in February, but the credit crisis and a stalling Japanese economy mean the Bank of Japan is still seen as more likely to cut interest rates this year than raise them. Unemployment edged up in February while household spending was flat from a year earlier, data showed on Friday, prompting Economics Minister Hiroka Ota to renew her warning that the economy was stalling. The Bank of Japan has been looking for a...