The U.S. Federal Reserve cut its benchmark rate to 0.25 percent earlier today slashing a full seventy-five basis points from the 1 percent rate in effect since the last Federal Reserve meeting in October. Vowing to use “all available tools” the Fed – despite the prevailing prediction of a half a percentage point cut – opted instead to cut deeper by taking the rate to its lowest level ever.
While announce the rate reduction, the Federal Reserve pledged to keep interest rates at a low rate for as long as necessary to turn the corner on the growing economic slowdown.
“The committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time,” the central bank’s panel that sets interest rates said in a statement.
It is expected that commercial banks will act quickly to reduce rates charged to customers.
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