The Fed had announced that he would down 0.25 points to leave rates at 2%, as it has been, but after seeing the economic growth data for the first quarter of the year, doubts have begun to emerge.
GDP growth has not been as bad as expected, 0.6%. That is, we can not yet be in recession, as this is the accumulation of two quarters of negative growth and the first quarter of the year was not one of them.
So if growth was not so bad, why lower the rates? Inflation has picked up a lot and cutting rates does not help control prices. However, the Fed has decided to give a final stimulus to the economy, continuing with its decision to lower them, and in the press hinting that there will be a break in the lower interest rates. And we have
rates at 2%, half that in Europe, and the level of December 2004. We hope that when the liquidity crisis ends quickly the Fed is raising rates otherwise we will find a new bubble.
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