US Federal Reserve cuts interest rate again

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Washington, Jan 31: The US Federal Reserve on Wednesday cut a key interest rate for the second time in just over a week, reducing the federal funds rate by a half point. It also signalled that further rate cuts were possible.

The Federal trimmed its base federal funds rate a half-point to 3.0 per cent in its cut reduction to help an economy that some say is on the brink of recession. The action came a week after an emergency cut of 0.75 pc points in the face of a global market rout amid concerns the US economy was headed toward recession. "Financial markets remain under considerable stress and credit has tightened further for some businesses and households," the Federal Open Market Committee (FOMC) said after the vote.

On inflation, the Fed officials said that they expected inflationary pressures to moderate in coming quarters but they also pledged to monitor price developments closely.

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