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US: Cuts and Consequences
Just as it marks the transition from summer to fall, September has often been a transitional month for monetary policy and financial markets. In September 1998, the Federal Reserve initiated an interest-rate-cutting cycle and a bailout of Long-Term Capital Management in the wake of financial crises in Asia and Russia. In September 2007, the Fed began cutting rates at the dawn of what would become the global financial crisis. A year later, Lehman Brothers’ bankruptcy on 15 September 2008 marked a peak in that crisis. The authors of this column witnessed the aftereffects of Lehman’s collapse firsthand in midtown ... (full story)