About · Press · Contact · Write For Us · Top Personal Finance Blogs
Featured In:

Understanding the Move That The Fed Made Last Week

By Erik Folgate

If you’re still confused about what the Fed did last week to supposedly “buy the economy some time” from going into a recession, then check out this article from Kiplinger’s Online. Kiplinger’s does a good job of answering the most frequently asked questions that may be on your mind about what the Fed actually did by cutting the discount rate and what it means to the economy and to us.

Just as a warning, you’re going to see many people start getting pessimistic about the economy. Their attitude will be not if the economy goes into a recession, but WHEN it goes into a recession. I still don’t think this is true. The national deficit has slowly been declining and exports were up over the past couple of weeks. I have a hard time believing that the slumping housing market and the mortgage/credit woes are going to put our economy in a recession. Yes, the housing market is important, but it’s not the only thing that drives our economy. Plus, it has been down before, it only takes time for people to save up enough money to actually AFFORD the houses they buy. My prediction is that you’ll start to see the housing market make a turn for the better in the spring of 2008.

Did the Fed really need to do this? I don’t think so, but it kept a lot of people from jumping off of the George Washington Bridge.

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

Related Articles

  • Eric

    I think it’s a token move to satisfy those who have lost confidence in the fed to monitor and adjust as needed.

The content on MoneyCrashers.com is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, consult a licensed financial or tax advisor. References to products, offers, and rates from third party sites often change. While we do our best to keep these updated, numbers stated on this site may differ from actual numbers. We may have financial relationships with some of the companies mentioned on this website. Among other things, we may receive free products, services, and/or monetary compensation in exchange for featured placement of sponsored products or services. We strive to write accurate and genuine reviews and articles, and all views and opinions expressed are solely those of the authors.

Advertiser Disclosure: The offers that appear on this site are from credit card companies from which MoneyCrashers.com receives compensation. This compensation may impact how and where products appear on this site, including, for example, the order in which they appear on category pages. MoneyCrashers.com does not include all credit card companies or all available credit card offers, although best efforts are made to include a comprehensive list of offers regardless of compensation. Advertiser partners include American Express, U.S. Bank, and Barclaycard, among others.