MoneyRates Blog
Central Banks Coordinate and Drop Interest Rates 50 Points
By MoneyRates team | Money-Rates Columnist
Global stock market selloffs and dire economic predictions have prompted a concerted effort by central banks to calm financial markets. Central Banks in the United States and Europe have lowered their key lending rate 50 points today.
Joint statement Issued 10/8/2008:
Throughout the current financial crisis, central banks have engaged in
continuous close consultation and have cooperated in unprecedented joint actions such as the provision of liquidity to reduce strains in financial markets.
Inflationary pressures have started to moderate in a number of countries, partly reflecting a marked decline in energy and other commodity prices. Inflation expectations are diminishing and remain anchored to price stability. The recent intensification of the financial crisis has augmented the downside risks to growth and thus has diminished further the upside risks to price stability.
Some easing of global monetary conditions is therefore warranted.
Accordingly, the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, Sveriges Riksbank, and the Swiss National Bank are today announcing reductions in policy interest rates. The Bank of Japan expresses its strong support of these policy actions.
Consumers in the United State should feel the effects of lower interest rates as all credit cards and loans which are indexed to the Prime Rate (now 4.50%) will be lower. Bank deposit rates will be effected as well over the next few weeks.
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