Fed Lowers Benchmark Rate by a Quarter Point to 4.25 Percent

[swag]

Source: Bloomberg

By Craig Torres

Dec. 11 (Bloomberg) -- The Federal Reserve cut its benchmark interest rate by a quarter-point to 4.25 percent to prevent the housing slump and credit squeeze from undoing the six-year expansion.

The change ``should help promote moderate growth over time,'' the Federal Open Market Committee said in a statement after meeting today in Washington. ``Recent developments, including the deterioration in financial market conditions, have increased the uncertainty surrounding the outlook for economic growth and inflation.''

The economy is faltering after a third-quarter surge as house prices drop, consumer spending slows and banks tighten lending standards for even their best customers. Chairman Ben S. Bernanke has struggled to insulate the economy from financial- market instability since the central bank began reducing borrowing costs in August.

``Incoming information suggests that economic growth is slowing, reflecting the intensification of the housing correction and some softening in business and consumer spending,'' the FOMC said. ``The committee will continue to assess the effects of financial and other developments in economic prospects and will act as needed to foster price stability and sustainable economic growth.''



Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=atye.jOlLAmQ&refer=home

[spinbaby]

1. The markets are dropping like a rock

I thought they liked this kind of rate cut?

[Double T]

4. FED didn't go far enough for THEM. The markets wanted at least a 50 point cut, across the board.

[Selatius]

2. Hello inflation.

Cutting interest rates at a time of record-high gas price inflation is dumb. It'll simply stoke more inflation. Because it takes fuel to move goods from the manufacturing plant to the store shelf, high gas prices translate out into food price inflation as well as other goods.

[HowHasItComeToThis]

3. WALL STREET WILL HAVE A FIT

THIEVES THOUGHT THEY HAD HALF A POINT

[Gman]

6. Yeah, the half point was built in the last few days

they didn't get it so they're bailing. Don't feel too sorry for the shorters. They're making a killing today.

[Xipe Totec]

5. Too little, too late. Market is dropping like a rock nt