On Radio Left Wing news at 0300 and in today's New York Times came the news that the federal Reserve has cut its base interest rate by a whopping 0.75%, in response to the fears of a US recession. Adolf can't remember such a large movement by the Fed but it certainly appears to have halted the panic. I wonder if Mr Bollard will see fit to follow? I doubt it. We will see the hot money flood back into NZ as we sit at 8.25% compared with 3.5% in the US.
As a direct result of the Fed's move the slide halted and a recovery took place.
"But after opening down by more than 460 points, the Dow Jones industrial average was off about 75 points, or 0.6 percent, at 1 p.m.
Other indexes were down slightly more, but still less than the futures markets had indicated. And European markets came surging back, shaking off early losses to post gains of 1 to 3 percent."
The NZ market posted a significant recovery yesterday, on the back of a falling dollar and associated good fortune for exporters.