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Reply #83: Fed slashes key rate to near zero (CNN) [View All]

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Hugin Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Dec-16-08 03:12 PM
Response to Reply #77
83. Fed slashes key rate to near zero (CNN)
Edited on Tue Dec-16-08 03:16 PM by Prag
"Ben Bernanke & Co. cite weakness in economy and reduced inflation threat as justification for cutting rates to a record low range of 0% to 0.25%."


By Chris Isidore, CNNMoney.com senior writer
Last Updated: December 16, 2008: 3:39 PM ET

Housing market rocked again

NEW YORK (CNNMoney.com) -- In its latest effort to try and stimulate the U.S. economy, the Federal Reserve cut its key interest rate to a range of between zero percent and 0.25%, and said it expects to keep rates near that unprecedented low level for some time to come.

The central bank typically sets a specific target for its federal funds rate instead of a range. The rate had previously been at 1% and this marks the first time the Fed has cut rates below 1%. Most investors were expecting the Fed to cut rates to either 0.25% or 0.5%.

The federal funds rate is an overnight lending rate used as a benchmark to set rates for a variety of loans, including adjustable rate mortgages, credit cards, home equity lines of credit and business loans. This marks the tenth time it has cut rates in the last 15 months.

Several banks announced they were lowering their prime rate to 3.25% in light of the Fed's decision. Typically, the prime rate is 3 percentage points higher than the fed funds rate. It was 4% before Tuesday's rate cut.

More ons... http://money.cnn.com/2008/12/16/news/economy/fed_decisi...

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It's the rate cut boogie.

The LAST rate cut boogie... Ever.
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