Adding to several aggressive steps to boost the economy this week, the Federal Reserve lowered its target benchmark interest rate by 0.75 percentage points to 2.25 percent.

The Fed justified the move citing weakening economic activity, softer labor markets, financial markets under considerable stress and a deepening housing crisis in the coming quarters. The Fed's policy making group, known as the Federal Open Market Committee, voted 8-2 in favor of the action with chairman Ben Bernanke in the majority.

Today's policy action, combined with those taken earlier, including measures to foster market liquidity, should help to promote moderate growth over time and to mitigate the risks to economic activity, the Fed said in a statement. However, downside risks to growth remain.

The Fed acknowledged rising prices, saying inflation has been elevated with expectations rising as well. However it added that it expects inflation to moderate in the coming quarters with energy and commodity prices easing and lowering pressure for resource utilization.

The Fed also approved on 0.75 percent decrease in the Fed's Discount Window rate to 2.5 percent.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; Sandra Pianalto; Gary H. Stern; and Kevin M. Warsh. Voting against were Richard W. Fisher and Charles I. Plosser, who preferred less aggressive action at this meeting.