VIRGINIA BEACH, VA, October 31, 2007 -- Following is a statement from economics and investment expert Jim Flinchum on the Federal Open Market Committee's decision today to cut the Fed Funds Rate and Discount Rate by a quarter point each:

"Sometimes what is good for the stock market in the short run is bad for the overall economy in the long run.  Decreasing interest rates decreases the value of the dollar, which increases the likelihood of inflation by making all imported goods more expensive.  But the real nightmare scenario is finding ourselves in the same box as Japan, where their central bank has lost the ability to 'jumpstart' their economy because their interest rates are already too low.

"Today’s interest rate reduction is another 'shotgun' approach of lifting an entire economy (that grew a healthy 3.9 percent in the third quarter), when only a 'rifle' approach is needed, desperately needed, to prop up the residential real estate sector."

Feel free to contact Flinchum for more comment and analysis at: (757) 641-3378, jim@baycapitaladvice.com.

About Jim Flinchum
Flinchum is the managing principal of the financial planning and investment company Bay Capital Advisors in Virginia Beach. His deep understanding of the financial world, national and global economics, and investing make him an outstanding Expert Resource for your articles. For more than 35 years he worked in senior-level positions for some of America's premier banking institutions, taught economics for the American Institute of Banking and the University of Texas, and served as a gubernatorial appointee to the State Depository Board.

Jim Flinchum contact
jim@baycapitaladvice.com, (757) 641-3378