Not the Deepest Rate Cut
Add a Comment 
feds, rate cuts March 18th, 2008The Fed’s cut of three-quarters of a percentage point is less than investors were expecting, but markets rallied nonetheless
After weeks of surprisingly aggressive moves to arrest the credit crunch, the Federal Reserve on Mar. 18 surprised the markets in the opposite direction—cutting interest rates a bit less than anticipated. It cut the federal funds rate by three-quarters of a percentage point, to 2.25%, rather than the 1% cut that most traders had been expecting.
What’s more, two of the voters on the Federal Open Market Committee dissented, saying they thought the cut was too aggressive. That indicates Federal Reserve Chairman Ben Bernanke might not be able to gather enough votes to push rates much lower if he thinks doing so is necessary to protect the economy.
