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September 5, 2008 8:55:39 PM CDT

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Fed Cuts Key Rate by Half Point

Posted Jan 30, 08 1:24 PM CST in Business 

(Newser) – The Federal Reserve cut a key interest rate by a half percentage point today, reports the Wall Street Journal, bringing the benchmark overnight lending rate down to 3% even as officials signaled that further cuts were possible. The widely anticipated move follows last week's emergency .75% cut to a rate that stood at 5.25% just a few months ago.

The half-point cut signaled the Fed's desire to expedite economic recovery, even if it meant  quickly raising rates should the cuts go too deep. Citing "a deepening of the housing contraction as well as softening in labor markets," the Fed said that while the cumulative cuts "should help to promote moderate growth over time, downside risks to growth remain."

Source Wall Street Journal

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Glenn Callen, an equity trader with Knight Capital Group, follows stock prices on his computer screen following the open of trading on Wednesday, Jan. 20, 2008 in Jersey City, N.J. The Federal Reserve...   (Associated Press)
Federal Reserve Board Chairman Ben Bernanke discusses the economic outlook while testifying before the Congressional Joint Economic Committee on Capitol Hill in Washington in this Nov. 8, 2007, file photo....   (Associated Press)
Federal Reserve Board Chairman, Ben Bernanke, speaks at the CATO Institute's annual Monetary Conference in Washington in this Nov. 14, 2007 file photo. Twice the Fed has cut rates this year and officials...   (Associated Press)
Glenn Callen, an equity trader with Knight Capital Group, follows stock prices on his computer screen following the open of trading on Wednesday, Jan. 20, 2008 in Jersey City, N.J. The Federal Reserve...   (Associated Press)
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US economy  • Federal Reserve  • recession  • Ben Bernanke  • interest rate cut  • Fed  • short term interest rate


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