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Thread: Sharp interest cuts in UK fails to cheer up the stock market!
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[quote=GEARBOX,343689]First of all, the Fed Funds rate is only a target and is used by the Fed to increase or decrease money suppy in the economy, and yes it could go down to zero. Japan did this during 2001 to 2006. The US target fed rate is 1%, but the realized rate for the past quarter was .67%. Implications are the lower the rate, the more money is in circulation which would stimulate the economy. Once the rate goes to zero, the Fed has other ways of increasing money supply by buying up T-bills and asset backed securities. Hope this helps, Allan[/quote]
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