Credit Crunch Limited Impact on Economy
Federal Reserve reported on Wednesday that the painful credit crunch is taking its worst toll on the already ailing housing market, while its impact on the rest of the economy so far seems limited. Both Wall Street and Main Street have anxiously awaited the Fed’s survey of business conditions for clues about what the central bank
will do regarding interest rates on Sept. 18, its next regularly scheduled meeting.
Economists increasingly believe the Fed at that meeting will lower a key interest rate, now at 5.25 percent, by at least one-quarter percentage point to protect the economy from the credit crisis. The Fed has not lowered this rate in four years.
The Fed’s report said the following, “”Outside of real estate, reports that the turmoil in financial markets had affected economic activity during the survey period were limited.”
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