Fed Chief Gives No Hint of Imminent Rate Cut

The New York Times reports Friday, August 31, that the chairman of the Federal Reserve Board says the central bank is poised to protect the broader economy from the mortgage crisis, but stopped short of promises of a rate cut.

General consensus is that when it meets September 18, the Federal Reserve’s Open Market Committee will drop its Federal Funds Rate, the interest rates banks pay to borrow money from each other, by a quarter to a half point to put it in line with the discount rate (the rate The Fed charges banks to borrow money from it), which was dropped by a half a point on August 17.