22 January 2008 14:06 [Source: ICIS news]
LONDON (ICIS news)--The US Federal Reserve has slashed US interest rates by three-quarters of a percentage point, the US central bank said on Tuesday, amid a weakening economic outlook and, the Fed said, increasing downside risks to growth.
Share prices had tumbled worldwide ahead of the Fed's emergency move - a week before the scheduled six-weekly meeting of the interest rate setting committee - and on the back of fears the US economy was heading into recession.
"While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households," the Fed said in a statement.
"Moreover, incoming information indicates a deepening of the housing contraction as well as some softening in labour markets," it added.
The federal funds rate is now at 3.5%.
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