CNN's Velshi: Federal Reserve Board is 'Late to the Party'

     Investors weren’t the only ones disappointed with the Federal Reserve Board’s actions on December 11.

 

     The Fed’s decision to cut the Fed funds rate 25 basis points and the Fed’s statement that accompanied the cut caused the Dow Jones Industrial Average (DJIA) to fall nearly 300 points.

 

     CNN senior business correspondent Ali Velshi was critical of that statement on December 12.

     Investors weren’t the only ones disappointed with the Federal Reserve Board’s actions on December 11.

 

     The Fed’s decision to cut the Fed funds rate 25 basis points and the Fed’s statement that accompanied the cut caused the Dow Jones Industrial Average (DJIA) to fall nearly 300 points.

 

     CNN senior business correspondent Ali Velshi was critical of that statement on December 12.

 

     “[T]he statement – the first line of the statement – read that the Fed seems to think that because of the evidence coming in that there might be some slowing in economic growth,” Velshi said during the 9:00 a.m. hour of the “CNN Newsroom.” “And I think a lot of people throw their arms up and say, ‘come on, guys, you know, yeah, we know there is slowing in economic growth.’ They seem to be a little late to the party and I think investors think that they don't have their finger on the pulse.”


     Velshi’s comments came the day after a CNN/Opinion Research Corporation poll was released stating voters think the economy is a more important issue than the Iraq war. The poll also revealed 57 percent of voters think the United States is in an economic recession and 26 percent think one is likely in the next year.

 

     But even CNN’s Heidi Collins’ admitted the media has done their fair share of hyping recession.

 

     “Well, with all this talk of a recession, and we keep on doing it in the media to be fair, can we expect another big drop in the stock market today?” asked “Newsroom” co-anchor Collins.

 

     Velshi also seemed to be aware of the influence of too much recession talk.

 

     “[A]nd by the way, we get a fair amount of criticism at CNN about the fact that we have these conversations, but mine is not to start a recession or stop one,” Velshi said earlier on the December 12 “American Morning.” “It’s to tell you what you guys are thinking about a recession and see where it goes.”

 

     Velshi previously emphasized the importance of how the economy “feels” instead of the definition of a recession, saying on October 18, “But, the bottom line is to most Americans, a recession is what it feels like to you.”


     CNBC’s Jim Cramer has also criticized the Federal Reserve’s latest action saying on December 11, “I’m very sad [about the rate cut]” and complaining to the Fed “You delayed the recovery.”