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History suggests Fed can’t make ‘insurance cuts’ to keep expansion alive

Federal Reserve officials have spoken approvingly of the idea of “insurance” interest-rate cuts that could be enough to shore up financial markets and keep the expansion on track.

“Now, if you look back at Fed history– I’m not looking to the future, if you look back at Fed history, there have been times when the Fed in the ’90s took out some insurance cuts. We saw that in ’95, we saw that in 1998,” Fed Vice Chairman Richard Clarida, said in April.

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