Richard W. Fisher, president and CEO of the Federal Reserve Bank of Dallas,  was once one of the most expressive economist imaginable often using graphic and sensationalist words and expressions to get our attention when describing the ‘nightmarish predicament’ and ‘monstrous challenge’ that has finally engulfed us. It was only a year ago that he warned that a ‘frightful storm is brewing’ – ‘the mother of all financial storms’ – that could well plunge the U.S. government deeper into a ‘fiscal abyss’ causing the country to become submerged in a ‘vast fiscal chasm’. Fisher has not always been so dramatic in spite of saying recently ‘I am a Texan and Texans speak plainly and directly’ and he is not being very direct these days either.

Fisher once was distracted from the truth but today it would seem that he is being compelled to ignore his very own words of warning referring …

The Federal Reserve used up almost all of its remaining conventional ammo today as it desperately tries to prevent the second Great Depression. The statement is below, along with the previous statement, and with my commentary interspersed."The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 1/4 percent."  "The Federal Open Market Committee decided today to lower its target for the federal funds rate 50 basis points to 1 percent." Hard to believe that just six weeks ago the fed funds rate was at 1.50%. Now we are near zero. The use of a range is unusual and perhaps unprecedented. Then again, the fed funds rate has never been this low before, and at the low end of the range I can safely say that it is a record that will never be ...

The Federal Open Market Committee decided to lower the target range for the federal funds rate between 0 and 0.25% during a closed door meeting on December 15 and 16, with the review and determination by the Board of Governors of the advance and discount rates to be charged by Federal Reserve Banks.  The target was previously set at 1% on the October 29th meeting.  The discount rate was cut by 75 basis points to 0.5%.  Voting for these actions were: Ben S. Bernanke, Chairman; Christine M. Cumming; Elizabeth A. Duke; Richard W. Fisher; Donald L. Kohn; Randall S. Kroszner; Sandra Pianalto; Charles I. Plosser; Gary H. Stern; and Kevin M. Warsh.

This is the lowest the target for the funds rate had been set to.  Although the threat of inflation is no longer an issue, as the CPI report this morning shows the index fell by

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The Fed left the funds rate unchanged at today's policy meeting. Here is the post-meeting statement ..."The Federal Open Market Committee decided today to keep its target for the federal funds rate at 2 percent."Strains in financial markets have increased significantly and labor markets have weakened further. Economic growth appears to have slowed recently, partly reflecting a softening of household spending. Tight credit conditions, the ongoing housing contraction, and some slowing in export growth are likely to weigh on economic growth over the next few quarters. Over time, the substantial easing of monetary policy, combined with ongoing measures to foster market liquidity, should help to promote moderate economic growth."Inflation has been high, spurred by the earlier increases in the prices of energy and some other commodities. The Committee expects inflation to moderate later this year and next year, but the inflation outlook remains highly

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The Fed decided to keep the Fed Funds rate at 2.0%, disappointing many who were hoping for an ease in response to the current market turmoil.  The statement they put out is substantially more dovish than they had been, leaving the door open to a cut in the near future. 

The market did not originally take the news kindly, but the market is now up.  The statement says:

"The Federal Open Market Committee decided today to keep its target for the federal funds rate at 2 percent.

"Strains in financial markets have increased significantly and labor markets have weakened further. Economic growth appears to have slowed recently, partly reflecting a softening of household spending. Tight credit conditions, the ongoing housing contraction, and some slowing in export growth are likely to weigh on economic growth over the next few quarters. Over time, the substantial easing of monetary policy, combined with ongoing measures to

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