Tue, Mar 18 2008, 18:22 GMT
FXstreet.com (Barcelona) – The Federal Reserve’s Monetary Policy Committee has decided to cut interest rates by 0.75 basis points to 2.25%, after their monetary policy meeting.
The rate cut, which has been approved by 8 votes against 2, and it follows a 25 basis points surprise rate cut approved on Sunday.
This decision was widely expected by the analysts, although there were differences about the extent of the rate cut, as the Bank has taken a strong commitment to help the Banks to avoid a major scale liquidity crisis, as it has been seen earlier this week when the Bank supported financially the acquisition of the Bear Sterns Bank by JP Morgan Chase & Co.
The Central Bank has already cut interest rates from the 5.25% level in September to the actual 2.25% in order to mitigate the effects of a crisis in mortgages that has already turned into a great scale credit crisis, which has made the major figures of US economy swift their language from the “economic slowdown” speech to openly acknowledge that US economy is going through a serious recession.
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