CNN 30.4.2008
The Federal Reserve cut the fed funds rate, a key overnight bank lending rate, by a quarter-percentage point to 2%, as expected. In its closely-watched statement, the central bank indicated that the economic outlook is not as dour as it has been recently and that its rate-cutting campaign could soon take a breather.
The announcement fulfilled expectations that some inflationary concerns are creeping in, said Steven Goldman, market strategist at Weeden & Co. But It also indicated that the bankers think the economy is starting to or will soon start to respond favorably to the series of cuts already in place, he said. As a result, "this may be the last cut for the foreseeable future,' he said.
The recent rally in stocks over the last month suggests that the equity market is looking ahead and anticipating a better environment. "Hopefully, upcoming economic news will reflect that optimism," Goldman said.