On Tuesday, December 16, 2008 the Federal Open Market Committee (FOMC) lowered the federal-funds-rate target from 1% to between 0.25% and 0%. According to the FOMC statement, The Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time. Another main reason behind the massive reduction in the federal-funds-rate target is the suppression of emerging price deflation. The consumer price index (CPI) fell by 1.7% in November from the month before. This was the biggest monthly fall since 1947. (In July 1949 the CPI fell by 0.9%.) Most commentators regard … Continue reading Why Congress Must Stop the Fed’s Massive Pumping