Rates end

An interesting piece of information concerning the Federal Reserve’s decision to reduce interest rates Wednesday: just four of the 12 regional reserve banks requested a reduction in the discount rate (the rate the Fed charges banks to borrow directly from them), a relatively low number. Through 2007, when the Fed was aggressively easing rates, more than five regional banks requested reductions in the Fed’s discount rate, and Robert Brusca, economist at Fact and Opinion Economics, notes that when the number of requests starts to decline, it can be a harbinger that interest-rate cuts are nearing an end. The final three meetings in 2007 and the first two scheduled meetings in 2008 saw at least six banks request a cut in the discount rate, but the requests became more sporadic throughout the summer — when three or four banks asked for such a reduction. In 2001, the last interest-rate cut came after just one bank asked for a cut in the discount rate. “When they don’t have a lot of district banks saying they want to do it tends to be at the end,” Mr. Brusca says.
http://blogs.wsj.com/marketbeat/2008/10/29/four-at-four-what-just-happened/