Another notch down

摘要

Faint-hearted or far-sighted? On October 31st the Federal Reserve gave financial markets what they had wanted and expected: a quarter-point cut in the federal funds rate, to 4.5%. Despite some internal misgivings and one outright dis senting vote, the central bankers decided that the risks to America's economy warranted slightly cheaper money. The logic is simple enough. Credit markets, though not as chaotic as in the late summer, are still fragile. And the outlook for the economy has darkened in recent weeks as the housing bust has deepened. The pace of home-building is plunging; big falls in applications for building permits suggest more declines ahead.