Reserve Cuts Interest Rates to 5 ¾ Percent
The Federal Reserve board has approved a 50 basis point reduction
in the primary credit rate, to 5 3/4 percent. The board says this
action is intended to narrow the spread between the primary credit
rate and the Federal Open Market Committee's (FOMC) target federal
funds rate to 50 basis points.
"These changes are designed to provide depositories with greater
assurance about the cost and availability of funding," says
the announcement from the board.
According to a statement issued by the FOMC, "Financial market
conditions have deteriorated, and tighter credit conditions and
increased uncertainty have the potential to restrain economic growth
going forward. In these circumstances, although recent data suggest
that the economy has continued to expand at a moderate pace, the
Federal Open Market Committee judges that the downside risks to
growth have increased appreciably."
HERE to read the Federal Reserve Board discount rate action.
HERE to read the statement issued by the Federal Open Market