The U.S. economy has entered a full-blown recession. The big bankers know it and they are determined to shift the burden of the downturn off themselves and onto the backs of the working class. The U.S. Federal Reserve Bank clearly said the economy is in a recession with its surprise move Jan. 3 to cut the short-term interest rate by half a percentage point. This is its biggest cut in eight years.
Bankers resist cutting interest rates, since it reduces their profits.
Usually cuts in the rate are small. So a big cut is generally seen as a sign of fear. What bankers fear is that loans won't be paid back. Lowering interest rates is supposed to ease a recession by making money more easily available. Wall Street agrees that the economy has entered a recession.