Brad DeLong notes that Martin Feldstein would have gone for a 100 basis points drop and that the normally cautious William Poole did not dissent from the 50 basis point cut.
Today’s irresponsible 50 basis point reduction is really just the hair of the dog that bit us and is a tacit admission that our economy is addicted to cheap money… A Fed bailout in the form of rate cuts will neither prevent the recession nor keep house prices from collapsing. It may slow the process down a few quarters, but it will cost us dearly.
Oh dear, Mr Schiff sounds a lot like AB reader Don Marek. My view is a lot closer to that of Martin Feldstein.