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The eBearing News
October 4, 2001


U.S. Federal Reserve Cuts Key Interest
Rate By 0.5% to 2.5%
copyright © 2001 eBearing Inc.

In its second interest rate cut since the terrorist attacks of September 11, 2001, the U.S. Federal Reserve cut the key Federal Funds rate from 3% to 2.5%. Other central banks may follow suit within the next few days as weakness continues to spread across the world's major economies.

[ click here to read the Sept. 17 rate reduction article ]

On January 1, 2001, the rate was 6.5%; today's 2.5% level is the lowest since the Kennedy administration in 1962.

Lowering the rate to 2.5% is a key move, as it also takes the interest rate below the projected inflation rate for 2001/2002.

In its accompanying statement, the Fed said, "The terrorist attacks have significantly heightened uncertainty in an economy that was already weak. Business and household spending as a consequence are being further damped. Nonetheless, the long-term prospects for productivity growth and the economy remain favorable and should become evident once the unusual forces restraining demand abate."

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- by Bruce A. Carr
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eBearing.com ... for everything that moves™
Entire contents Copyright © 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered trademarks of eBearing Inc.