Feds Get Political Pressure to Cut Rates

Amid political pressure, Chairman Bernanke, cut interest rates 50 base points to 4.75 per cent.  Both Democrats and Republicans are applauding the move and some are surprised at the bold move based on thoughts that the Chairman would err on the side of caution.  The Feds took the step to help improve the financial markets and ward off inflation.  The housing market has been hit hard and it is hoped that the move will help to correct the problem.  The market surged after the announcement and took this as the first of a “rate-cutting cycle.”  Bernanke only commented to “act as needed.”