Why is the Federal reserve cutting interest rates?

Question

why is it cutting the interest rates if they know t going to cause inflation

Answer 1

The Fed Needs to start raising rates. Inflation is about to get out of control if energy and food inflation isn't checked. When your barber says that haircut is going to cost more because he has to pay more to drive to work, we are all in trouble.

Answer 2

Because economic growth is slowing, the GDP is declining, and there's a credit crisis (sub-prime loan crisis, etc.).

The Fed has to make a call between stimulating the economy vs. inflation.

Right now, they're focusing on the fact that the economy needs stimulating.

I'm not saying they're right, just saying that's what they're doing.