Fed cuts key interest rate by half point - Hindustan Times
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Fed cuts key interest rate by half point

Reuters | By, Washington
Jan 31, 2008 11:15 AM IST

The US Federal Reserve cuts a key interest rate for the second time in nine days to halt the economic slowdown.

The Federal Reserve cut a key interest rate by a half-percentage point on Wednesday as part of an aggressive effort to halt a sharp slowdown in an economy hit by a housing slump and a credit crunch.

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The Fed's action takes the bellwether federal funds rate target to 3 per cent, the lowest since June 2005, and comes just eight days after it slashed rates by a bold three-quarters of a point. Wednesday's follow-up reduction was in line with the expectations of many financial market participants.

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The cumulative 1.25 percentage point reduction in the benchmark overnight rate in less than two weeks ranks among the most abrupt rate-cutting sprees in the modern history of the US central bank.

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