CNN's Velshi Says Fed is 'Late to the Party' on Economy

Investors and the business media are piling on the anti-Federal Reserve bandwagon after they cut the Fed funds rate only 25 basis points on December 11.

Immediately following the announcement of that cut, the Dow Jones Industrial Average (DJIA) tumbled down to close nearly 300 points and that fueled outcries about the Fed.

CNN senior business correspondent Ali Velshi criticized the decision on December 12:

"[T]he statement - the first line of the statement - read that the Fed seems to think that because of the evidence coming in that there might be some slowing in economic growth," Velshi said during the 9:00 a.m. hour of the "CNN Newsroom." "And I think a lot of people throw their arms up and say, ‘come on, guys, you know, yeah, we know there is slowing in economic growth.' They seem to be a little late to the party and I think investors think that they don't have their finger on the pulse."

Velshi also used the Fed news as an opportunity to report Americans are down on the economy according to a CNN/Opinion Research Corporation poll.

The poll stated voters think the economy is a more important issue than the Iraq war. The poll also revealed 57 percent of voters think the United States is in an economic recession and 26 percent think one is likely in the next year.

However, CNN's Heidi Collins admitted the media have played a role in hyping the possibility of a recession.

"Well, with all this talk of a recession, and we keep on doing it in the media to be fair, can we expect another big drop in the stock market today?" asked "Newsroom" co-anchor Collins.

Velshi also seemed to be aware of the influence of too much recession talk.

"[A]nd by the way, we get a fair amount of criticism at CNN about the fact that we have these conversations, but mine is not to start a recession or stop one," Velshi said earlier on the December 12 "American Morning." "It's to tell you what you guys are thinking about a recession and see where it goes."