The Federal Reserve Open Market Committee has cut the fed funds rate by 1 percentage point to 4.25 percent since September. Yet, according to the Federal Reserve Board Chairman’s Ben Bernanke, additional policy easing may well be necessary in light of recent changes in the outlook. “We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks", the chairman said this Thursday’s to the Women in Housing and Finance club in Washington D.C. The Federal Reserve cut its target for the federal funds rate by 50 basis points at its September meeting and by 25 basis points each at the October and December meetings. Traders are now pricing in as much as 88 percent probability of a 50 bps rate cut to 3.75 percent, according to short term Fed Funds futures.
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