No more Fedspeak on further interest rate cuts
Sunday May 25, 11:00 am ET
By Jeannine Aversa, AP Economics Writer
Fed officials abandon Fedspeak to make clear interest rate unlikely to move lower
WASHINGTON (AP) -- Sounding a gong couldn't have made it clearer. Federal Reserve officials are putting out the word that further interest rate cuts are unlikely.
Fed Governor Kevin Warsh ditched the central bank's cryptic word tangles and actually waxed poetic. "Even if the economy were to weaken somewhat further, we should be inclined to resist expected, reflexive calls to trot out the hammer again," Warsh said, referring to the Fed's key interest rate.
Speaking more central-bankerly, the Fed's No. 2 official, Vice Chairman Donald Kohn, said the current stance of interest-rate policy "appears to be appropriately calibrated for now." Janet Yellen, president of the Federal Reserve Bank of San Francisco, called the current level of rates "appropriate."
Does this mean that easy credit is no longer the answer to all the economic problems that have been caused by easy credit?