Fed Funds to Remain at 2% for Now

The big headlines to come out of the Federal Reserve Bank meeting is that “interest rate cutting is done.” After lowering the Fed funds rate seven consecutive times, the Fed is not lowering this key interest rate again. Despite the shaky condition of the economy, the Fed by their action to leave rates where they are is telling everyone that other considerations now must be weighed into the equation. With the price of gas going up rather suddenly and rising by more than one dollar within the period of one year, the Fed is concerned with the prospects of a new round of inflation.

The chairman of the Fed, Ben Bernanke, will now try to talk inflation expectations down. This may work, but a little help from the Bush administration could help too. What can the Bush administration do? The first thing the Bush administration could do is start behaving like they are concerned about people that are not making over $150,000 a year. Second, close down the Enron loop hole in the rules for commodity trading in the United States. This one act would take some of the speculation out of the oil trading business. Repair relations with oil producing countries and see if there is anything we could do for them. Talk to the American people about using less oil. Make people feel like it will take a little from all of us to get through this current energy crisis. Unfortunately, I do not see any of those ideas being implemented, as this is one of the most incompetent presidents this country has had in over 200 years. The country is more than ready for new leadership.