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Fed steers US rates lower by quarter point
The US Federal Reserve last night demonstrated its
determination to steer the American economy away from recession when it
cut its key interest rate for the seventh time this year and signalled
that borrowing costs could fall again.
announced it was cutting its funds rate by a quarter of a point to 3.5
per cent, its lowest for seven years, and also reduced its largely
symbolic discount rate. The discount rate fell a quarter of a point to 3
per cent, matching lows seen in the early 1990's.
a statement released alongside the rate decision, the Fed reiterated
its so-called "easing bias", a signal that rates are more likely to fall
than rise, saying that the risks to the US economy remained "weighted
mainly toward economic weakness".
The Fed said:
"Business profits and capital spending continue to weaken and growth
abroad is slowing, weighing on the US economy".
In connection with recession in the American economy, the aim of the Fed is to