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Fed Lowers Key Rate to One Percent

The ""U.S. Federal Reserve"":http://www.federalreserve.gov cut its benchmark interest rate for federal funds - the rate at which banks lend to each other overnight - by half a point to one percent on Wednesday. Other central banks around the world followed suit, also reducing rates or announcing that they were considering the move.
Yesterday's decrement marked the second big rate reduction by the Fed this month. On October 8, the U.S. central bank led a coordinated ""global rate cut"":http://dsnews.comview_story.cfmxid=2988, dropping the target interest rate here in the States by half a percentage point at that time as well. The current rate of one percent brings the benchmark number close to record-lows hit in 2003, when the Fed was trying to stimulate economic recovery after the Internet bubble popped.
Policy makers are now desperately trying to contain the economic depression that began with the mortgage market, taking a series of what it called ""extraordinary liquidity measures"" to try and ease credit conditions. Analysts, however, say yesterday's rate reduction is not likely to have a significant effect at this point. The Fed hinted at the possibility of going still lower in its ""public statement"":http://www.federalreserve.gov/newsevents/press/monetary/20081029a.htm, warning ""downside risks to growth remain.""

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
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