Is a Coordinated Rate Cut Needed at This Point?

  • Coordinated rate cut increasingly likely to relieve contractionary pressure on economies from credit crisis. There have already been coordinated liquidity measures and isolated rate cuts among emerging and developed economies
  • Deterioration in the health of financial sector and related severe strains in the funding markets have increased the tail risk of deflation for the real economy. Policymakers may soon be forced to pull all available strings, including rate cuts by all the major central banks (Morgan Stanley)
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