FOMC Enters Realm of 0% Interest Rates

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The FOMC voted, and the Fed Funds Rate has now been given a TARGET RANGE of 0% to 0.25%.

The Discount Rate was cut 0.75% and is now at 0.50%.

Some of the statements are as follows:

  • Sees rate at exceptionally low levels for some time;
  • Labor markets have deteriorated;
  • Inflationary pressures diminished appreciably;
  • Inflation to moderate in coming quarters;
  • Will purchase large quantities of Treasuries;
  • Vote: was 10-0 for FED FUNDS rate action;
  • Outlook for economic activity has weakened further;

A link to the text of the FOMC statement is here.

The dollar just tanked on this news against foreign currencies.

The 10-Year is now yielding 2.43% and the 30-year Treasury yield came in to a low yield of 2.88% right after the news.

Jon C. Ogg
December 16, 2008