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Wednesday, November 07, 2001, updated at 16:01(GMT+8)
World  

US Federal Reserve Announces Fresh Rates Cut

The US Federal Reserve on Tuesday cut the key federal funds rate by one half of a percentage point to 2.0 percent.

The move, which marked the 10th interest rate cut by the central bank since the beginning of this year, reduced the federal funds rate to the lowest level in 40 years.

In a related action, the Federal Reserve also reduced the symbolic discount rate by the same margin from 2.0 percent to 1.5 percent.

"Heightened uncertainty and concerns about a deterioration in business condition both here and abroad are damping economic activity," the Federal Open Market Committee, the central bank's policy-making body, said in a statement released after a scheduled meeting.

"For the foreseeable future, then, the Committee continues to believe that, against the background of its long-run goals of price stability and sustainable economic growth and of the information currently available, the risks are weighted mainly toward conditions that may generate economic weakness," the committee said.

It's reported so far this year, the Fed has cut the rate by 4.5 percentage point in order to ease pressure following the terror attacks on the United States, which drag the U.S. economy into a recession.

Full Text of US Federal Reserve Statement on 10th Rates Cut

The US Federal Reserve on Tuesday announced its 10th rates cut this year, reducing the key federal funds rate by one half of a percentage point to 2.0 percent which is the lowest level in 40 years. The following is the full text of a statement released by the central bank's policy-making body, the Federal Open Market Committee.

"The Federal Open Market Committee decided today to lower its target for the federal funds rate by 50 basis points to 2 percent. In a related action, the Board of Governors approved a 50 basis point reduction in the discount rate to 1-1/2 percent.

Heightened uncertainty and concerns about a deterioration in business conditions both here and abroad are damping economic activity. For the foreseeable future, then, the Committee continues to believe that, against the background of its long-run goals of price stability and sustainable economic growth and of the information currently available, the risks are weighted mainly toward conditions that may generate economic weakness.

Although the necessary reallocation of resources to enhance security may restrain advances in productivity for a time, the long-term prospects for productivity growth and the economy remain favorable and should become evident once the unusual forces restraining demand abate.

In taking the discount rate action, the Federal Reserve Board approved the request submitted by the Board of Directors of the Federal Reserve Bank of Richmond."









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The US Federal Reserve on Tuesday cut the key federal funds rate by one half of a percentage point to 2.0 percent, which reduced the rate to the lowest level in 40 years.

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