What Now Fed?
There is no reason - NONE - to believe that tax cuts will stimulate the economy. That is only one of a long string of right wing fantasy talking points. Too bad Obama has bought* into it.
Having decimated reserve requirements decades ago, the only weapon the Fed now has to fight deflation is interest rate cuts (if you are willing to believe** they even have that power.) With the Federal Funds rate in the range of zero, they have nothing left.
“On December 16, 2008, the Federal Open Market Committee established a target range for the federal funds rate of 0 to 1/4 percent.“ Dayly value as of 1/06/09 is 0.09%
http://www.newyorkfed.org/markets/omo/dmm/fedfundsdata.cfm
Winter is coming.***
Graph from SHS Financial Publishers. Permission to use is granted on their web site.
http://library.hsh.com/?row_id=88
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*Or been coerced, or cross-aisle-reached, etc …
**Oh ye of much faith.
*** Words of House Stark, via G.R.R. Martin
