Fed Cuts Key Rate by Half Point

Officials signal further cuts possible as overnight lending rate hits 3%
By Polly Davis Doig,  Newser Staff
Posted Jan 30, 2008 1:24 PM CST
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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(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."