The Federal Reserve lowered the fed funds rate yesterday from 5.25% to 4.75% and the discount rate from 5.75% to 5.25% to apparently restore confidence to the stock and credit markets.
Meanwhile, the Labor Department yesterday reported that the August Producer Price Index fell 1.4% (seasonally adjusted). Today, they announced that the August Consumer Price Index was down 0.1% from a year earlier.
Investor's Business Daily noted today that, the "Fed believes the crises in credit markets is more severe than generally presumed."
Nobody seems to be mentioning that repricing of homes and buyout deals represents money which has just evaporated.
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