Assessing the Historic Federal Reserve Rate Cut

NJBIZAugust 24, 2009

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Yet "Congress is almost certain to pass some sort of stimulus," says Seneca. "There's not much the state can do to help, since New Jersey needs long-term, structural changes," he adds. "But the question is whether or not the federal government can get enough money in people's hands soon enough to stave off a recession."

The surprise Fed move, which slashed the federal funds rate that banks charge one another for overnight loans by three-quarters of a percent, came the week before this week's regularly scheduled meeting and suggested that further cuts may lie ahead. Economic conditions in the state were stronger than the rest of the country's in the fourth quarter of 2007, according to a Federal Reserve Bankof Philadelphia report last week The bank's "coincident index," based on nonfarm payroll employment and other job-related data, showed a 0.7 percent gain for New Jersey in the quarter, compared with a 0.5 percent increase for the United States as a whole.

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Assessing the Historic Federal Reserve Rate Cut

When a jittery Federal Reserve Board cut interest rates by the largest single-day amount on record last week, some Newjerseyans wondered what all the shouting was about.

"What recession?" asks Marilyn Richards, executive vic...

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