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Posts Tagged ‘Fed’

EmploymentCrossing.com The Federal Reserve, in coordination with foreign central banks, has reduced its key interest rate from 2 percent to 1.5 percent. The Bank of England followed suit, cutting its rate by half a point to 4.5 percent, while the European Central Bank lowered its rate to 3.75 percent. The central banks of China, Canada, Sweden, and Switzerland are cutting their rates as well. In addition, the Fed reduced its emergency lending rate to banks by half a percentage point to 1.75 percent. In response, the prime lending rate for millions of borrowers will drop by a corresponding amount. The prime rate applies to certain credit cards, home equity lines of credit and other loans. The Feds action revives the central bank’s rate-cutting campaign, which was halted in June out of concerns that low rates would worsen inflation. Since then financial conditions have dangerously deteriorated, forcing the Fed to reverse course. The cuts come as markets in Asia and Europe sink amid waning confidence, the UK steps in to support banks, and Russia closes its main stock market for two days.