FXstreet.com (Barcelona) - The Federal Reserve's Monetary Policy Committee has decided to cut interest rates by 50 basis points to 3% after their monetary policy meeting. The decision, which has been approved by 9 votes against 1, caps an unprecedented eight-day period in which officials slashed rates massively to ward off recession risks.
Officials signaled they're willing to ease still further in coming weeks even though the economy continued to grow, albeit slowly, at the end of last year - a reflection of the risk management approach to policy that officials have now embraced. But they also suggested that the cumulative 225 basis points in policy easing over the past four months may be enough to keep the economy on track.
The funds rate stood at 5.25% as recently as September.
Recent information indicates a deepening of the housing contraction as well as some softening in labor markets, the Fed said. While past rate cuts, combined with Wednesday's, should help to promote moderate growth over time...downside risks to growth remain, the Fed said.