August 5, 2008 — The Federal Reserve cut the benchmark interest rate by 1.5% to a new target lending rate of 0% yesterday, the Federal Open Market Committee said in a statement in Washington. It’s the largest reduction since the Fed began using the rate as primary tool of fiscal policy around 1990.
“Broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households,” the Fed said in a statement in Washington. The FOMC took the action “in view of a weakening of the economic outlook and increasing downside risks to growth.”
The Fed continued, “After a long review of our inflationary data, the determination has been made that inflation does not exist.” When asked about $5.00/gallon gasoline and skyrocketing rental costs, the Fed declined comment, merely stating that energy costs are not part of inflation data.
John Thompson, Senior Staff Analyst at RBB Associates, believes that this will solve the country’s economic woes. “Interest rates are a thing of the past. We no longer believe that they are necessary, since we can print as many greenbacks as needed to pay for our luxaries, Mexican labor, and cluster bombs. As long as the government continues to spend this money, it will exchange hands and wealth will be generated an infinite amount.”
When asked about the Euro reaching an all-time high of 1 Euro to 8 US Dollars, Thompson remarked that “European central banking will soon follow suit to eliminate interest rates and order will be restored. Clearly they will want to keep pace with the most powerful economy in the world.”
Despite panic among treasury traders, the Dow Jones closed up at 12,753.53 points. Most impressive gains were in the services sector, which were up 3.4%, despite data showing that nobody has had work for 4 months.
John McCain, former Republican Presidential Candidate and Congressman, was overheard saying “0% interest rates should get us through this election, at which point Mitt Romney will win the Presidency and we can continue to do the Federal Reserve’s biddings. The draft won’t be far off, and we’ll no longer have to worry about economics ever again”
A representative of the middle class was sought for comment, but none could be found.