WASHINGTON– Responding to the continuing woes of the world's financial markets and the decline in prices, the Federal Reserve today cut a key interest rate to an all-time low.
The Fed's Open Market Committee unanimously approved reducing the rate that banks use when lending to each other to between 0 and 1/4 %.
It's the third rate cut approved by panel since October and in a statement the committee said it plans to keep rates "exceptionally low" for some time.
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"Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further," the committee said in a statement after its two-day meeting. "Meanwhile, inflationary pressures have diminished appreciably. In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters."
Today's vote was unanimous.
Recent bleak economic data included today's report that the consumer price index fell 1.7% last month and a report earlier this month that unemployment reached 6.7%.
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