17/12/08-The United States Federal Reserve Bank cut interest rates to between 0 and .25 percent, a record low. The previous rate was 1.0 percent, and the bank indicated that it was willing to keep rates low for an extended period of time to battle the ongoing recession.
In a statement released at the time of the cuts, the Fed said: “The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability.”
“Weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time,” the Fed continued, offering a commitment aimed at bringing long-term market-set interest rates down.
The announcement spurred a major rally by stocks as the Dow Jones industrial average lumped up over 350 points on the day. The decision did seem to undercut the dollar, which fell to a recent low against the euro. The European Central Bank has held rates at 2.5 percent, among the highest rates among developed countries.
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