h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

So the US federal bank has cut its base rate interest to

"somewhere between 0 and 0.25%"

so does that mean 0.125%, 0.1%... what?

How can they set an indeterminate interest rate?

It's because US economists have moved from the Newtonian to the quantum paradigm of economics. The closer you look, the less certain it is.


Actually, where did you read that? I just look at the beeb news site and couldn't find anything.

<< Many analysts had expected a cut to 0.5%, rather than the Fed's move to between zero and 0.25%. >>

from http://news.bbc.co.uk/1/hi/business/7787239.stm

That is weird.

From here...
http://blogs.wsj.com/economics/2008/12/16/the-fed-speaks-more-on-todays-decision/

"Why did the Fed select a target range for the federal funds rate?

The central bank hasn’t used a target range before. But with the day-to-day variation in the funds rate, a range more realistically describes how the Fed can manage the rate, the senior Fed official said. Aiming for a range — zero to 0.25% — is designed to keep the rate target a bit above zero in a way that would be more conducive to market functioning, the official said. The Fed also set the discount rate at 0.5% and the rate paid for interest on reserves at 0.25%, which should help to keep the effective funds rate in the market above zero"

It seems that the range is just to make life a bit easier.

Still weird though.

Indeed, thanks for that and apologies for not pasting the link in.

Terrible manners to expect you responders to do all the work

Yes it is. Shame on you.