Federal Reserve Lowers Interest Rates By Half a Point!

Submitted by SadInAmerica on Thu, 10/09/2008 - 5:29am.

The US Federal Reserve on Wednesday lowered its target for a key US interest rate by half a point to 1.5 percent "in light of evidence pointing to a weakening of economic activity and a reduction in inflationary pressures".

The cut in the federal funds rate came simultaneously with interest rate cuts by other central banks as financial markets plummeted around the world amid concerns over the impact of the global financial crisis.

The Fed released a joint statement by central banks stating they had been in "continuous close consultation" throughout the current financial crisis and "cooperated in unprecedented joint actions such as the provision of liquidity to reduce strains in financial markets".

"The recent intensification of the financial crisis has augmented the downside risks to growth and thus has diminished further the upside risks to price stability," the statement said.

"Some easing of global monetary conditions is therefore warranted. Accordingly, the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, Sveriges Riksbank, and the Swiss National Bank are today announcing reductions in policy interest rates," it said.

"The Bank of Japan expresses its strong support of these policy actions."

October 8, 2008 - source AFP

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Submitted by SadInAmerica on Thu, 10/09/2008 - 5:29am.