The Hindu : Business : Fed cuts rate by 75 basis points

Online edition of India's National Newspaper
Wednesday, Jan 23, 2008
ePaper | Mobile/PDA Version

Business

Business

Fed cuts rate by 75 basis points

The biggest one-day move follows global stocks sell-off

WASHINGTON: The Federal Reserve, confronted with a global stock sell-off fanned by increased fears of a recession, cut the key interest rate by three-quarters of a percentage point on Tuesday, the biggest one-day move by the central bank in recent memory. The Fed said it was cutting the federal funds rate, the interest that banks charge each other on overnight loans, to 3.5 per cent, down by three-fourths of a percentage point from 4.25 per cent. The Fed action was the most dramatic signal it can send that it is concerned about a potential recession in the U.S.

It marked the biggest one-day move by the central bank in recent memory.

The Fed decision was taken during an emergency telephone conference with Fed officials on Monday night. Those discussions occurred after global financial markets had plunged on Monday as investors grew more concerned about the possibility that the U.S., the world’s largest economy, could be headed into a recession.

In a brief statement, the Fed said it had decided to cut the federal funds rate “in view of a weakening of the economic outlook and increasing downside risks to growth.” — AP

Printer friendly page
Send this article to Friends by E-Mail

Business