That would put a floor under the stock market and ease corporate worries about spending money on new equipment in a slowing economy. But a look at recent Fed history shows that talk is cheap when it comes to monetary policy, and not very effective. In addition, every month that the Fed waits before acting makes it that much harder to avoid a downturn. Historically, it takes 12 to 18 months for interest-rate changes to have an effect on the economy. That means even if the Fed cuts rates in January, it will take quite some time before the lower rates boost growth.
Monetary policy is still the single most powerful economic tool available.
If the Fed implements a dramatic rate cut soon, it can still avoid the worst of the downturn. Bid on or offer business services Web design, logo design, computer consulting, and more. Business Week Online may receive a share of any fees you pay for services. The McGraw-Hill Companies Inc. All rights reserved.