Interest Rate Limbo

Posted by: Ben Steverman on March 18, 2008

Thanks to the Federal Reserve’s three-quarter-point interest rate cut, the U.S. now has the lowest interest rates of any country except Japan. The U.S.’s 2.25% Fed funds rate compares to New Zealand’s 8.25% and Great Britain’s 5.25%.
“If the U.S. economy does not recover or liquidity problems do not ease, we still believe that the Federal Reserve could drop interest rates to 1 percent, which would come close to matching Japan’s levels,” notes Kathy Lien, chief strategist at DailyFX.com.
Japan’s rate is pegged at 0.5%.

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About

Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

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