Related Resources • Economic Indicators • Funds for a Down Market

From Other Guides • Waiting for Greenspan

Elsewhere on the Web • Fed Cut History Back to 1971 • More Info on Greenspan and the Fed

Why Did They Cut the Rates?

Here's what they said: "Although continuing favorable trends bolster long-term prospects for productivity growth and the economy... the risks are weighted mainly toward conditions that may generate economic weakness in the foreseeable future. "  If you would like to read the full statement, click here.

What is the Fed and who is Greenspan?

The Federal Reserve (Fed) is the central bank of the United States and was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system.  The Fed has the ability regulate the U.S. money supply and interest rates to influence economic outcomes (this is called Monetary Policy).

Alan Greenspan has been the Chairman of the Board of Governors of the Federal Reserve System since 1987.  He is world famous for his excellent monetary policy work and notorious for his ability to influence the stock market with his announcements.

What is the Federal Funds Rate?

The Fed funds rate is the interest banks charge each other for overnight loans to help them satisfy the Fed's reserve requirements. The rate plays a big part in determining banks' cost of capital and the growth of money in the U.S. economy.

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