Stocks Rebound After Lehman Sale, Fed Loan
Fed Leaves Key Interest Rate Unchanged
Fed Leaves Key Interest Rate Unchanged
The Federal Reserve said strains in financial markets have "increased significantly," but it kept a key interest rate unchanged Tuesday. The central bank said Tuesday it was keeping its target for the federal funds rate, the interest that banks charge on overnight loans, unchanged at 2 percent. In a statement, the Fed said "strains in financial markets have increased significantly and labor markets have weakened further."It continued by saying, "Economic growth appears to have slowed recently, partly reflecting a softening of household spending."Analysts had said the chances of a rate cut were growing, whether it came Tuesday or later this year. Meanwhile, in an urgent effort to keep cash flowing amid a Wall Street meltdown, the Federal Reserve pumped $50 billion into the nation's financial system Tuesday in an attempt to stem credit stress. The Federal Reserve Bank of New York's action came in addition to its regular market operations to inject $20 billion into the system slated for the day.Congress Weighs New Regulations
A Congress criticized for being asleep at the switch as financial problems festered on Wall Street is now eyeing tough new regulations for investment banks. It's also exploring a new government role in the mortgage market.Lawmakers may impose much stiffer regulations to put a stop to the array of financial products and practices that have some of Wall Street's institutions on the brink of failure.They're also weighing what to do with mortgage giants Fannie Mae and Freddie Mac. Options include taking them private, morphing them into a public utility or federal agency, or leaving them as government-sponsored entities with private shareholders and profits, but tougher regulations.But with just seven weeks until Election Day and lawmakers focused on campaigning, there's no chance anything will happen this year.
- September 16, 2008: US Financial Fallout Ripples Worldwide
- September 15, 2008: Financial Adviser: Don't Panic
- September 15, 2008: Merrill Lynch Sold, Lehman Seeks Chapter 11
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