Zero Percent!

This week the central bank lowered its interest rate that banks charge each other on overnight loans to 1 percent. The main purpose for this drop is to get banks to start lending. Now what a lot of people don’t realize is that this rate fluctuates. Even before the Fed cut the rate on Wednesday it was already below 1 percent. And that’s because banks are so scared to lend money to anyone. If banks remain on the same course for this month the rate very well could fluctuate to zero percent. And this is what most analysts feel is what is needed, zero percent interest rates. If dropping to zero percent doesn’t jumpstart the economy what is next? There is a lot more options that the Fed can do to start the economy. So this isn’t really a main concern. Japan dropped their interest rate to zero percent for 5 years. So maybe we should do the same to get things moving. And then focus on other options if needed. We’ll get through this, American history has show Americans can battle anything.