At yesterday’s[EN1] much anticipated FOMC rate-setting meeting members of the committee decided to cut the target Fed Funds rate by one quarter of a per cent so that their band now stands between 1.75 and 2.00 per cent, the minimum market participants had expected. The trouble is, a liquidity crunch this week has meant that this rate has already traded at 2.3 per cent and that the central bank was forced to offer shovel-fulls of cash to temper the overnight repo rate. In his statement chairman Powell said, ‘’this is a time of difficult judgements, as you can see, disparate perspectives. I really do think that’s nothing but healthy’’.
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