The Federal bank is now searching for some new ways to revive the economy. The bank slashed down the interest rate so that the gasping real estate market could get some air to breathe. This step was taken so as to bolster the mortgage rates and save the real estate market.

The market was in turmoil due to the sub prime crisis and the government since then has done everything it can to revive the market and save the economy from sliding down.

But as the downtrend continues and the central banks world over are slashing down the interest rates further, the Federal bank is on a look for some other innovative ways so as to prevent the downslide of the economy and instill new life to bring it out of recession.

In previous months the central bank slashed the inter bank interest rates so as to distort the prices and stoke inflation. This made the dollar cheaper which made the oil and food prices cheaper for the consumers.

This step was taken so as to promote the consumer spending. But that increased marginally. That was due to the high prices of the fuel and food which were marginally affected. Because of this, businesses have suffered a setback. Their profits are shrinking while they continue to face the increasing production and other business associated costs.

As the commodities such as gold, silver, copper and agricultural products showed an upward trend in September questions are being raised as to what impact they will have on the future oil and food prices and how will they affect the economy and the common man.

Not only the gold but the crude oil showed an upward trend. Crude ended up at dollar hundred a barrel in November after gaining dollar thirty a barrel consecutively for first four days. The agricultural futures were also traded at higher prices.

As the December ends and the recession continues the government is now far more concerned to revive the economy rather than worry about inflation. Where the government of Japan has come up with their budget and declared that they are under the tsunami of recession the situations are no less different for the US government.

The central bank is now searching for some other innovative solutions. It is now planning to print dollars for the students, governments and the borrowers. This will no doubt push up the prices in the future.  But the bank at present is concerned about pulling the economy out of recession. The inflation rates can be controlled once the economy is out of the biggest ever recession faced by the countries world over.

Tags: commodities market, commodities stoke inflation fears, economic inflation