![]()
- US Will Borrow Less as Banks Pay Back Funds: Geithner
- Wal-Mart Holiday Forecast Light, Profit Beats
- US Mortgage Refinancing Up; Buying Demand Sinks
- Kohl's Profit Beats Street, But Outlook Falls Short
- United Tech to Buy GE Security Unit for $1.82 Billion
- Gold Hits $1,122, Barrick Chief Says Selloff Possible
- Wall Street Pay Is Often too High: Bill Gates
- Morgan Stanley Gets Aggressive in Luring Brokers
- Foreclosures Fall Again But Improvement Likely Fleeting
- Ford, Hyundai, Audi Gaining Interest
- This Drug Firm Will Snap Up 50% By Mid-2010: Trader
- Warren Buffett Ranked #14 On Forbes 'Most Powerful People' List
- What to Expect From Disney Earnings?
- HP's Shot Across Cisco's Bow
- USC Football Blog Leads All-Access Space
- Clowning Around At Work
- Ahead of Earnings Disney Restructures Studio
- Nov. 11: Unusual Volume Leaders
MOST SHARED
- Wal-Mart Holiday Forecast Light, Profit Beats
- How the Droid and Google Threaten the GPS Makers
- Jobless Claims Post Another Drop as Picture Improves
- CNN Anchor Lou Dobbs Says He is Leaving Network
- Shopping for Answers
- HPQ to Acquire 3Com
- Obama Most Powerful Person in World: Forbes
- Pricier Beer Helps AB InBev Operating Profit
- Highest State Foreclosure Rates
- Rising Jobless Biggest Threat to World Trade: WTO
The Federal Reserve cut its key interest rate another half point, as expected, and sparked a stock market rally by signaling that further rate cuts are possible.
The Fed's action takes the bellwether federal funds rate target to 3 percent, the lowest since June 2005, and comes just eight days after the central bank made a surprise three-quarters point reduction because of fears the U.S. economy was heading into a recession.
![]() |
Dennis Cook / AP Federal Reserve Bank Chairman Ben Bernanke |
The half-point cut Wednesday followed news that the the U.S. economy grew a weaker than expected 0.6% in the fourth quarter, less than half what had been expected. The report came amid increased concern from several quarters about a possible recession.
In a brief statement explaining their decision, Federal Reserve Chairman Ben Bernanke and his colleagues said that "financial markets remain under considerable stress."
The Fed move was approved on a 9 to 1 vote. Richard Fisher, president of the Fed's Dallas regional bank, dissented, preferring no change in rates.
The rate cut marked the fifth time that the Fed has cut the funds rate since it started with a half-point cut on Sept. 18 in response to the severe credit crisis which hit global markets in August.
The latest Fed action was expected to be quickly followed by cuts in banks' prime lending rate, the benchmark rate for millions of consumer and business loans. The Fed's hope is that by making credit cheaper, it will encourage more borrowing, giving the economy a needed boost.
The Fed's half-point move met expectations of financial markets and was a bolder move than the smaller quarter-point cut that many economists had been expecting.
In CNBC’s latest “Trillion Dollar Snap Survey”, roughly four out of five respondents said the Fed made the right decision, but only 4 percent would grade Bernanke’s overall performance an “A”. (See full results)
Despite all the recession fears, the economic news lately has been more mixed.
A report Wednesday by ADP Employer Services showed private-sector employers added 130,000 jobs in January, about double what economists expected.
The official Labor Department report on January employment is scheduled for release on Friday.
A report Tuesday showed much stronger-than-expected demand for long-lasting U.S.-made goods in December, while weekly reports have shown initial claims for jobless benefits
declining.
- Billboard allows music lovers to watch concerts for free online, choosing from five different camera angles as they watch.
- US real estate prices have fallen dramatically, but some places are still doing well. See the best-performing zip codes this year.
- An Italian cashmere maker aims to make profits while creating ideal conditions for his workers.
- Just in time for the holidays, the Triumph company of Japan offers the latest innovation in women’s undergarments.
- Vote and suggest your own, and remember--there's a fine line between a hero and a zero.
- The New York Times explains what the Senate will have to do to truly improve cost and quality in U.S. health care.












