With economic uncertainties comes new plan for economy
2008-06-27 15:28:38 (GMT) (Caymanmama.com - Business News)Virginia Beach, Virginia (CaymanMama.com) — With the sell off of Thursday’s stock market, one thing is for sure that the past nine months have failed to relieve the credit crisis while leaving the economy in utterly poor shape. The Dow Jones saw its industrial average slipping down to 3% on Thursday while facing a record low for the past 21 months just day after Fed kept its rate fixed despite previous nine months of rate cuts along with loans to numerous firms. According to the central bank, its main concern is the rising inflation yet it is also concerned about the economic growth that has become slower due to economic slowdown.
The economy struggles to maintain itself amidst strong negative forces. With a rate cut of 3.25% in the last year in order to strengthen the banking system that is struggling with the housing and bad loans dilemma while helping the consumer in recovering its loss and helping with purchasing power. Yet, the irony of the situation lies in the fact that both the business men and consumers had to face stiff circumstances due to rising fuel and food prices.
According to the chief of the Federal Reserve, Ben Bernanke, the problem lies in the fact that solving any one problem leads to the worsening of the other. This means that the Feds have to make a balancing act. This means that there will be more sell offs just like the one on Thursday where Dow Jones saw a fall of 20%.
According to Ed Yardeni, an economist, “The resilience of the U.S. economy has been remarkable over the past 12 months as the credit crisis spread beyond the subprime mortgage market and oil prices soared. Unfortunately, there may not be much more that the Fed can do to stimulate economic growth should the resilience of the economy continue to be tested by the credit crisis and oil prices.”
CaymanMama.com - Press Release Distribution Service
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