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.