US interest rates cut again

by Richard Allum on 30 January 2008

The Federal Reserve has cut interest rates for the second time in nine days as it tries to keep the US economy from entering a recession. The central bank lowered rates to 3% from 3.5% after a two-day meeting.

Last week, the Fed slashed the cost of borrowing by the largest amount in 25 years in a shock move to calm tumbling global stock markets. The Fed is hoping the cuts will cushion the US economy from the worst effects of the credit crunch and housing slump.

Data released earlier showed weak economic growth in the final three months of 2007 as the housing market slump deepened and consumer spending cooled. Growth slowed to an annual rate of 0.6% between October and December, half the rate forecast and compared with a brisk 4.9% growth rate in the previous three months.

See more on this story on the BBC site here.

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