It insists on the deterioration of the labour market

Despite the financial crisis that rocked Wall Street, Federal Reserve left its rates unchanged at 2. Even if it ensures follow the latest developments in the crisis carefully, it considers that the "inflationary prospects still remain highly uncertain." Wall Street first accused the coup. But the hope of a solution to avoid the bankruptcy of insurer AIG has restored forces.

Several voice had yet campaigned for a reduction of a quarter of a point. "The economy is very weak, recession knocks on the door and the financial system is facing new deflationary risks following the bankruptcy of Lehman Brothers, wrote Brian Bethune, at Global Insight. It is an emergency and must be an aggressive response from the Federal Reserve. "Following the woes of Lehman Brothers and the mild recession of inflation in August, some economists have revised upward the likelihood of a US monetary easing. In fact, prices for consumption in the United States fell month last 0.1 from the previous month in data corrected for seasonal variations. The Federal Reserve preferred to delay, as many economists believe that lowering rates is not the panacea to the current crisis and can create other hazards. From the last meeting of the monetary policy Committee, August 5, the Fed noted that tensions in the markets have increased, that the consumption of households is affected and that the export growth has slowed. It insists on the deterioration of the labour market. But it continues to believe that "considerable relaxation of monetary policy, combined with its measures to ensure market liquidity, should help to promote moderate growth".

The Central Bank is certainly agree a certain margin of manoeuvre for the sequence of events. After Lehman Brothers, Merrill Lynch and AIG's, which could force it to intervene with money public very soon, other financial institutions may be taken in the turmoil.

Open the valves maximum

"This maintenance is an implicit recognition by the Fed that it believes have the tools to ensure the liquidity of the financial system, said David Dresler, Chief Economist for Nomura Securities." By leaving rates unchanged, it kept a few ammunition if conditions deteriorate further.

Ben Bernanke, the Chairman of the Federal Reserve, is indeed open valves maximum to extinguish the fire by finding new streams of cash. Last weekend, he relaxed the conditions for obtaining the emergency funding that the Fed offers banks accepting as collateral any asset type noted "investment value", including the actions. The auction for this type of funding will now be weekly and the total amount available has been pushed to $ 175 billion 200 billion previously. As the Federal Reserve of New York, it has injected $ 70 billion in temporary reserves system banking Monday and again Tuesday. This level had not been reached since the attacks of September 11, 2001.

Ben Bernanke and Tim Geithner, President of the Federal Reserve of New York, also obtained that ten banks set up a "antifaillite Fund" of $ 70 billion in which they can draw. They were also asked to Goldman Sachs and JPMorgan Chase to provide between 70 and $ 75 billion to AIG's.

These flows must assist the financial community and stabilize markets. The Americans, who have little savings, have seen their stock holdings to deteriorate considerably, directly or through their retirement plans. But, at the time of the last stock market crisis, in 2000, the increasing value of their homes could offset losses in the stock market. This is of course more the case. Hence a slowdown in household consumption, as seen in the month of August.

This precipitates these days following the publication of articles of circumstance: "Ten ways to protect your finances" ("Wall Street Journal") or "How to survive the recession" ("Financial Times").