Central bank rates – Cutting as much as possible, and then what?

US Federal Reserve Bank: Now Fed is at 1,00% and Tuesday evening they are at 0,50%, maybe even 0,25% (I go for 0,50%). Going below 0,50% is very difficult as money market funds will create a negative return. Despite the money market funds a zero rate is in the cards. Trying to repair a credit bubble that exploded by getting credit rolling.

Bank of England: They will drive it as low as possible – to American and Japanese levels. 

European Central Bank: Very quickly taken down to 2,50% so now will Mr. Weber needs some time to digest. Further cuts are already priced in and also likely, but slowly towards 1,50% or 1,75% in 2009.

Bank of Japan: 0,30% and they might even cut again, but of course it won’t change anything.

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