Current Interest Rate Debate

The current state of the economy is heading back into a recession. However, I would advise Mr. Greenspan to leave interest rates alone and allow the economy to recover on its own, which is very probable. The March employment report is evidence that the economy is contracting. In addition to a decrease in employment, industrial production and spending are also decreasing. If the current economic conditions continue for much longer, the economy will go back into a recession.
However, the current weakness is dominated by Iraq uncertainty, the reason the central bank basically refused to even declare a policy bias. Whatever damage the Iraq war is doing to the economy, it is unlikely that a small cut in interest rates can make a difference. Given the fact that the federal funds rate is already at just 1.25%, investors and executives want to retain some type of back up in the event of an actual financial market crisis. Keeping all this in mind, a cut in rates cannot be ruled out. Even if F...