Fed Cuts Key Interest Rate ¾ Point

But Wall Street had hoped for more
By Sam Gale Rosen,  Newser Staff
Posted Mar 18, 2008 1:37 PM CDT
Jeffrey Vazquez of Merrill Lynch, Pierce, Fenner, & Smith watches his screen on the floor of the New York Stock Exchange, Tuesday, March 18, 2008.   (AP Photo/Henny Ray Abrams)
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(Newser) – The Federal Reserve today cut the federal funds rate by ¾ of a percentage point, from 3% to 2.25%, disappointing many investors who were hoping for a cut of a full point, reports the Wall Street Journal. The Fed voted 8-2 for the rate cut. "Recent information indicates that the outlook for economic activity has weakened further," the central bank said in a statement, adding it will take further action when needed.

On the plus side, the Fed also said it "expects inflation to moderate ... reflecting a projected leveling-out of energy and other commodity prices and an easing of pressures on resource utilization." But the size of the cut might also show that the Fed is nervous about the dollar's plunge.