Fed slashes rates - Jan. 22, 2008
Today, in response to growing concern that the United States' economy is heading towards a recession, the Federal Reserve lowered 2 key interest rates, the federal funds rate and the discount rate, both by three-quarters of a point. This is the first major cut made by the Federal Reserve for the year of 2008.
The interest rate cuts did manage to stave off a large drop in the U.S. Stock Market, where the Dow Jones Industrial dropped 400 points before the rate cuts were announced. The rate cuts will not be enough for the U.S. economy to recover. However, in combination with the propose tax rebate and other initiatives called by President George Bush to revitalize the economy might be enough to save it.