So far the Dow Jones is down 200+ points in a horrible market opening. The Fed injected more money into the system. What does that mean? From what I’ve been told and have read, injecting money to create liquidity lowers the interest rate. The Fed sets its interest rate but my guess is that it fluctuates depending on liquidity. Since liquidity’s been low as of late, even though the Fed interest rate is at 5.25%, the actual interest rate is higher. Things aren’t looking well in the housing and financial markets. Case in point, my fiancee’s father has been given 60 days to find a new job. What was his previous job? Homebuilder of course. Things are not looking good out there.
CNBC Update: Fed Adds Reserves to System for Second Time Today