Fed Reserve cuts interest rates to 1%
Wednesday 29th October 2008, 6:38PM GMT.
The Federal Reserve has cut US interest rates by half a point to 1.0 per cent in a move aimed at avoiding a possible recession.
Earlier this month, rates were cut from 2 per cent to 1.5 per cent in a coordinated move with five other global central banks.
“The pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures,” a statement from the Federal Open Market Committee said on Wednesday.
“Business equipment spending and industrial production have weakened in recent months, and slowing economic activity in many foreign economies is damping the prospects for US exports.”
The statement added that “intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit”.
The Fed said that its actions should, over time, help to improve credit conditions and “promote a return to moderate economic growth”.
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