Investors and traders are cheering the release of the minutes from the Federal Reserve meeting from September 18th. The committee also made it clear in their minutes that future interest rate moves would be decided based upon economic data and the reaction of the economy to the summer's market turmoil. 
The FOMC said that the 50 basis point cut was "the most prudent course of action" given the risks that the credit market and housing market turmoil could spillover into the broader economy. The Fed stated that it was concerned about "significant broader weakness in output and employment." All members were in agreement that the 50 basis point cut was the correct action to be taken.
The minutes also showed that the Federal Reserve had marked down its forecast for 4th quarter GDP growth and growth for the entire year of 2008. The Fed also predicts a modest increase in the rate of unemployment.
On the all-important inflation front, the Fed said that they were generally a little more confident that the decline in inflation from earlier in the year would be able to be sustained going forward. The Fed stated that the signifcant decline the dollar was still a major worry and that it could cause inflation problems if it continues.
The markets clearly liked the Fed minutes since the S&P 500 and Dow both closed at all time highs today.
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Tracked on: October 10, 2007 11:30 AM | Permalink to Trackback