Federal funds rate cut by 25 basis points


The Federal Open Market Committee decided on 11th December 2007 to lower its target for the federal funds rate 25 basis points to 4.25 percent. The central bank also cut its discount rate, which is what banks pay to borrow directly from the Fed, by a quarter-point to 4.75 percent

According to Federal Reserve Statement, incoming information suggests that economic growth is slowing, reflecting the intensification of the housing correction and some softening in business and consumer spending. Moreover, strains in financial markets have increased in recent weeks. Federal Reserve feels that this reduction action, combined with the policy actions taken earlier, should help promote moderate growth over time.

Readings on core inflation have improved modestly this year, but elevated energy and commodity prices, among other factors, may put upward pressure on inflation. In this context, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully.

Recent developments, including the deterioration in financial market conditions, have increased the uncertainty surrounding the outlook for economic growth and inflation. The Federal Committee will continue to assess the effects of financial and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth.

US Federal Reserve cuts interest rates to 4.5% (Oct 2007) ...Click here
US Federal Reserve cuts discount lending rate (Aug 2007) ...Click here
What is Sub Prime? ...Click here
Moody's downgrade 691 securities worth $19.4bn ...Click here
Moody's on sub prime exposures of US banks ...Click here
S&P report on today's credit market risks ...Click here

CLICK FOR MORE FEATURES & STORIES






click here                 



 

 

              Google
 
Web banknetindia.com

      Banking | Technology | Finance | Advertise | Terms of use | Disclaimer | Contact us
                         © Banknet India | All rights reserved worldwide.