Why the Fed is a Cutter...

As reported by CNN in their recent article about the Federal Reserve, "Bernanke and Co." have decided to cut the Federal Funds(i.e. the rate at which the Central Bank loans money to other banks) rate by a quater of a percent to reach a new target of 4.5%. While this new cut may seem minor to us ordinary citizens, the Fed hopes that this (combined with its earlier and largely symbolic rate cut of September) is the jolt our economy needs to get out of its slump.
If the housing market continues to slow the economy down considerably, especially running into December's holiday season, the Fed may consider cutting rates once again in December.

Federal Funds rates, for those not in the know, have a large say in how high interest rates rates are for both indivual consumers and also larger corporations.

However, the Fed's actions have not been unseen by critics who fear that such steep actions could plumment the already troubled economy into a deep abyss of inflation.

Only time will tell....

-Dr.Econ