May 1, 2008

Interest rates cut in the US

As food and fuel prices still carry on rising, the Federal Reserve in the States have cut interest rates again for the seventh month in row, but as prices continue to rise is this just delaying the inevitable?

It is believed or hoped, that the rising prices of fuel and food will not continue past a few more months, this means that the interest rate reduction is made to ease the problems that are hitting many people not just in the US but over here in the UK too.

The problem that will hit the US economy as a direct result of lowering interest rates even further is that the Dollar will become even weaker against the other stronger currencies. But as a result of this action, it will in fact make the cost of fuel higher and the knock on effect is added to all other products such as food.

Source [Yahoo]