Fed cuts interest rate

The Federal Reserve has cut its key interest rate by .25 percent, the
seventh such cut since September. The Fed Funds interest rate is now 2
percent, the lowest it has been since December 2004. “Recent
information indicates that economic activity remains weak. Household
and business spending has been subdued and labor markets have softened
further,” the Fed said in its statement. “Financial markets remain
under considerable stress, and tight credit conditions and the
deepening housing contraction are likely to weigh on economic growth
over the next few quarters.” Economists expect the Fed to stop cutting
interest rates for a while.