Fed lowers interest rates -- again
In a sign of concern about the housing market's impact on the economy as a whole, the Federal Reserve just lowered its key interest rate to 4.25 percent from 4.5 percent -- its third cut since the mortgage markets went into turmoil this summer.
The "federal funds rate" is what banks charge each other for loans, so it affects what the rest of us pay for financing of all sorts.
In its press release this afternoon, the Fed said:
"Incoming information suggests that economic growth is slowing, reflecting the intensification of the housing correction and some softening in business and consumer spending. Moreover, strains in financial markets have increased in recent weeks. Today’s action, combined with the policy actions taken earlier, should help promote moderate growth over time."
The Wall Street Journal reports that a "large minority of economists had projected a half-point cut in the federal funds rate."
Wells Fargo predicts that the Fed will lower the rate to 4 percent in January.
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