Fed Reduces Rates to 2%

The Federal Reserve trimmed interest rates another quarter point, to 2%, as expected, but left us guessing about whether further cuts would be needed.

The Fed action, after a two-day meeting, pushed benchmark short-term interest rates down to the lowest level since late 2004.

It also marked the seventh consecutive rate cut by the central bank since it began easing credit conditions last September to combat the growing threat of a recession brought on by a deep housing slump and credit crisis.

Ben Bernanke say's The rate cut will mean lower borrowing costs throughout the economy as banks reduce their prime lending rate, the benchmark for millions of consumer and business loans.

Though the Fed move was expected, it leaves us puzzled about where the central bank goes from here.

Unless the economy falls into a worse slump than currently expected. We at Bradley E. Arnowitz, P.A. & Associates view this statement as signaling somewhat of a pause.

The central bank is walking a tightrope, trying to jump-start economic growth while also confronting the risk that if it overdoes the credit easing it could make inflation worse down the road.

Fed policy-makers have been confronting a bleak landscape. The U.S. housing market has shown some signs of hitting bottom in certain areas of the country such as Bal Harbour, http://www.balharbourlistings.com/ and Aventura, Florida http://www.aventuracondolistings.com/ and Beverly Hills, while in others no sign is near and credit markets still appear strained.

The comming economic and housing sector reports will be a tell tale sign of where were headed. Let's hope that Bernanke and the Fed look to avoid another boom and bust cycle! With their focus on sound money, fighting inflation, along with long-term economic stability.

Bradley E. Arnowitz P.A. & Associates of Re/Max Beach Properties www.ArnowitzProperties.com is a full-service firm providing brokerage, development, sales investment, property management, asset management, and residential services for office, multi-family, industrial/commercial, residential, and retail properties.

Bradley E. Arnowitz, P.A. has been serving South Florida with Honesty, Integrity, & Results since 2001. For more information, visit Arnowitz & Associates on the web @ http://www.arnowitzproperties.com/ or contact the firm @ Re/Max Beach Properties, 1355 Alton Road, Miami Beach, FL 33139 or Re/Max Beach Properties, 672 E. Hallandale Beach Blvd, Hallandale Beach, FL 33009
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