Light At The End of Tunnel?

U.S. Federal Reserve policy makers now predict the U.S. economy will contract until the middle of 2009, according to the minutes of their October's FOMC meeting released yesterday. Government figures showed that consumer prices excluding food and fuel costs fell for the first time since 1982 last month.

This effectively increased the odds that the Fed will cut its benchmark interest rate again next month.

Deflation, is now a significant concern. Deflation refers to a prolonged decline in prices, which hurt the economy by making debts harder to pay off and lenders more reluctant to extend credit. Japan is the only major economy to have suffered the phenomenon in modern times. Looking at Japan as an example, the country has suffered from deflation and economic stagnation for more than a decade. Question is, will U.S. suffer the same fate too? On the other hand, there isn't a lot more room to maneuver given that benchmark interest rate is already at 1%.

What about the USD700billion bailout plan?

Does anyone see light at the end of tunnel yet? Personally, i have not!