WASHINGTON– Responding to the continuing woes of the world's financial markets, the Federal Reserve today cut a key interest rate by half a percentage point.
The Fed's Open Market Committee unanimously approved reducing the rate that banks use when lending to each other from 1.5% to 1%. It was the second time in three weeks that the bank cut the rate by half a percentage point.
“Recent policy actions, including today's rate reduction, coordinated interest rate cuts by central banks, extraordinary liquidity measures, and official steps to strengthen financial systems, should help over time to improve credit conditions and promote a return to moderate economic growth. Nevertheless, downside risks to growth remain,” the committee said in a statement.
Today's vote was unanimous, as was the committee's vote last vote on Oct. 8. That rate cut was made in conjunction with several other central banks to stem the worldwide financial and credit crisis.
The vote took place on the 79th anniversary of the Stock Market crash of 1929 that helped trigger the Great Depression. The current economic crisis is often referred to as the worst since that event.
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