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Economist: Fed has 'over-done it again' BISMARCK, ND (Prairie Public) - "The Fed, in my judgement, has overdone it again."

Creighton University economist Ernie Goss -- reacting to the action by the Federal Reserve to cut its target for a key interest rate to the lowest level on record. The federal funds rate -- the interest that banks charge each other -- was dropped to a range of zero to .25 percent. That's down from the 1-percent target rate in effect since the last meeting in October.

Goss publishes the monthly Mid American Business Conditions Index for the nine state region, which incudes North Dakota and Minnesota. He says the action by the Fed could mean significant inflation -- probably in 2010.

"Not only that, the Federal Reserve now only has one-quarter percent more that it can reduce interest rates," said Goss. "You're almost out of bullets there, in your federal reserve revolver."

Goss says this could mean significant inflation in 2010.

"And for states like North Dakota, where the economic downturn is significantly less, and one could argue that the state is not in a recession, that this could cause problems for North Dakota down the road," said Goss.

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