Fed cut the rate again, as everyone expected

by Corina Ciubotaru

As financial market analysts expected, the Fed cut rates on short-term loans once again, this time by quarter of a point. The move doesn't guarantee a quick recovery of the American economy, most analysts agree, but it is intended to give lenders a small boost as they can now return their own loans at much smaller costs. But even as some believe the risk of recession is still over 50 percent, economy indicators show it's still growing at a rate of 3.9 according to last quarter's figures. The dollar weakened a bit and the price of gold and oil rose again, but unemployment is still low and consumer spending rose by 3 percent. It's still the housing market that's doing badly, because buyers are having a hard time getting loans, so home builders will be in a slump of their own until house prices fall enough to make them affordable. The median price of houses decreased for eight consecutive months and analysts predict they will keep the same trend before demand rebounds. Consumer confidence is lowering and this is something that should scare policy-makers: a fifth of those surveyed said they believe there will be fewer jobs in the next six months, while less than 25 percent of them think there is enough employment, the lowest rate in the last year.Oil prices lowered by $3.27 to $90.26 today on the New York Mercantile Exchange, while the most important stock indicators Nasdaq, Standard & Poor's 500 and the Dow Jones average, haven't moved much, but their moves were mostly downward.

related story: http://news.yahoo.com/s/ap/20071031/ap_on_bi_ge/fed_interest_rates_housing;_ylt=Ar8kgmfwJluIXlihbrKIlsas0NUE

by Corina Ciubotaru for PocketNews (http://pocketnews.tv)

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