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September 8, 2008 5:58:36 AM CDT

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Fed Slashes Key Interest Rate Another Quarter-Point

Posted Oct 31, 07 1:42 PM CDT in Business,  US 

(Newser) – The Federal Reserve cut its key lending rate today by 25 basis points, to 4.5%. The expected reduction is the second of the federal funds rate in two months. The board asserted, however, that growth and inflation risks are now “roughly balanced,” a signal that further cuts shouldn’t be taken for granted. The discount rate was also cut by a quarter-point, to 5%.

A Fed statement said the cuts “should help forestall” a mortgage-induced meltdown. The Board of Governors was in what the Wall Street Journal calls an “awkward position,” as the economy’s strong third-quarter performance made a cut potentially ominous for inflation concerns. But Fed chairman Ben Bernanke’s real concerns lie in coming quarters; the board voted 9-1 to grease lending wheels.

Source Wall Street Journal

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Traders on the floor of the New York Stock Exchange wait for the Fed interest rate to be announced Wednesday afternoon Oct. 31, 2007. The Federal Reserve, confronted with surging oil prices and a slumping...   (Associated Press)
U.S. Federal Reserve Chairman Ben Bernanke waits for the start of the International Monetary and Financial Committee meeting at International Monetary Fund Headquarters in Washington, Saturday, Oct....   (Associated Press)
In a file photo Federal Reserve Board Chairman Ben Bernanke poses in the board room of Federal Reserve headquarters Friday, Jan 26, 2007, in Washington. Bernanke and his colleagues were wrapping up a...   (Associated Press)
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Ben Bernanke  • inflation  • mortgage  • interest rate  • interest rate cut  • Fed


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