China Gets a Global Credit Crunch Reality Check
Continued slowdowns in China’s major trading partners – particularly the U.S. – has forced the People’s Bank of China to make its first interest rate cut in six years, dropping one-year rates from 7.47% to 7.2%. As further evidence of shrinking exports, China’s inflation rate fell to a 14-month low of 4.9%.
Lehman’s Collapse Has Markets Thinking Rate Cut
As news broke that Lehman Brothers is preparing for bankruptcy, analysts predict that the Federal Reserve will cut interest rates at tomorrow’s FOMC policy meeting. Trading in bonds is expected to be heavy this morning as investors look to protect themselves from an interest rate cut.
Bank of America Buys Merrill Lynch for $50B
Wall Street took on a different look as the sun rose this morning. First Lehman Brothers – a Wall Street stalwart for 158 years – announced it will seek bankruptcy protection after failing to work out a deal to save itself, and then Bank of America announced that it was buying Merrill Lynch in a straight cash deal.
Wall Street Panic Drives Down the Dollar
Continuing strife on wall street has many thinking rate cut as the Fed attempts to calm nervous investors. The dollar has already retreated against the yen in early morning trading.
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