Should US Fed cut interest rates?BS Reporter / Mumbai August 11, 2007Should the US Federal Reserve help bail out billionaire hedge fund managers and millionaire traders - the very people who bought the risky mortgages that led to the current market panic? That, in essence, is the question swirling around Ben S. Bernanke as he confronts the first crisis of his 18 months as Fed chairman, according to a report on the website of The New York Times. There are no shortages of opinions, and some are being shouted. Jim Cramer, known for his histrionics on the CNBC financial news channel, angrily called for Bernanke to lower interest rates - something the Fed has resisted doing till now. A week ago, Cramer charged that the Fed was "asleep" and that the chairman "has no idea how bad it is out there" in the markets. Lower interest rates would help operators of hedge funds and other money managers because the housing market presumably would strengthen as mortgage rates fell. A revived mortgage market would give the hedge fund operators and other holders of the risky securities a chance to sell them, which they are having trouble doing now in the current nervous market.Others see a bigger danger for the economy in acting on the pleas of Cramer and others on Wall Street. Cutting interest rates to help the hedge funds would tend to encourage a resurgence of the very risky mortgage lending that has caused the current turmoil, rekindling the crisis. The issue is often referred to as
