The interest rates of federal funds have been lowered to 0.25 percent recently due to recession. Though the number seems so low, it seems that it is still not working.
According to a survey from Goldman Sachs, the lowered rates of federal funds are still not working effectively enough to stimulate the nation’s economy form gloom. Then what interest rate can be working? Is zero a good number? The answer, surprisingly, is no. They say that it is only when the Federal Reserve cuts the interest rates to negative 6 percent, it will work out.
This is going to hurt the US economy more. Already we are in turmoil of low running businesses and plummeting economy. All the major banks are already struggling to survive in middle of this chaos.
The zero interest rates is what are needed to work out for now. But by 2010, the Federal Reserve might require to cut the rates.
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