Reply #22: G7 wants to hear why Fed slashed rates-Italy source [View All]

[Ghost Dog]

TOKYO, Feb 8 (Reuters) - Finance ministers attending the G7 in Tokyo on Saturday want to hear from the United States about the reasons for the Federal Reserve's dramatic slashing of interest rates, an Italian G7 source said.

The G7 will also discuss the risk that short-term measures to stabilise markets, whether through interest rate cuts or liquidity injections, may have negative long-term consequences, the source said.

The uncertain prospects of the U.S. economy will be a major subject of debate, the official said in embargoed remarks made at a briefing in Rome on Tuesday, on condition he not be named.

"There's a great thirst for information (among the other ministers) about the picture for U.S. economy and the motivations behind the Fed's monetary policy moves which can only be described as dramatic," he said.

"It's important to hear where the United States economy is and what they intend to do."

/... http://www.reuters.com/article/marketsNews/idCATKV00300720080208?rpc=44