50 Basis-point cut by the FED; risk toward weakness
WASHINGTON, Nov 6 (Reuters) - The Federal Reserve cut U.S. interest rates by an aggressive half-percentage point on Tuesday for the third time since the Sept. 11 attacks and signaled its readiness to do more to help an economy widely believed to be in recession.
The Fed lowered its key federal funds rate for overnight bank loans for the tenth time this year to 2 percent -- the lowest level since the Kennedy administration in 1961. The central bank also dropped its more symbolic discount rate by a half-point to 1.5 percent.
The latest cut comes against an increasingly grim backdrop of rising unemployment and eroding confidence. The third quarter logged the sharpest quarterly contraction in national economic activity since the last recession in 1990-91.
In its statement, the central bank said it still saw weakness, rather than price pressures, as the main threat to the U.S. economy, a sign it was ready to cut rates further should gross domestic product continue to shrink as most private forecasters expect it will into early next year.
Tuesday, 6 November 2001 19:20:02
