Fed Slashes Key Interest Rate By Half Point

Washington, DC, January 30, 2008--The Federal Reserve on Wednesday cut a key interest rate by half a point, the second cut in a little more than a week.

The Fed pushed the funds rate to 3 percent. It followed a three-quarter point drop on Jan. 22, a day after financial markets around the world fell on fears of a U.S. recession. That decrease had been the biggest single rate slash in more than two decades.

The rate cut Wednesday followed news that GDP grew just .6 percent in the final quarter last year.

In a brief statement, the Fed noted that "financial markets remain under considerable stress."

The move was approved on a 9 to 1 vote.

The cut marked the fifth time that the Fed has cut the funds rate since it started with a half-point cut on Sept. 18.