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| Version 3 | Version 4 |
|---|---|
| US interest rates slashed to 1% | US interest rates slashed to 1% |
| (9 minutes later) | |
| The Federal Reserve has cut its key interest rate from 1.5% to 1% in a widely expected move, as it aims to avoid a possible US recession. | The Federal Reserve has cut its key interest rate from 1.5% to 1% in a widely expected move, as it aims to avoid a possible US recession. |
| Earlier this month the Fed cut rates from 2% to 1.5% in an emergency move, which was co-ordinated with five other central banks. | Earlier this month the Fed cut rates from 2% to 1.5% in an emergency move, which was co-ordinated with five other central banks. |
| Interest rates have been slashed since September 2007, when the federal funds rate stood at 5.25%. | Interest rates have been slashed since September 2007, when the federal funds rate stood at 5.25%. |
| The 1% level was last seen between June 2003 and June 2004. | The 1% level was last seen between June 2003 and June 2004. |
| The move is confirmation that inflation is no longer seen as the major threat to the US economy. | |
| 'Restraint on spending' | |
| "The pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures," said the Federal Open Market Committee headed by Ben Bernanke after the unanimous decision. | |
| "Business equipment spending and industrial production have weakened in recent months, and slowing economic activity in many foreign economies is damping the prospects for US exports. " | |
| The committee went on to say that an "intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit". | |
| Its statement also said the range of actions by the Fed and other banks to help get credit flowing "should help over time to improve credit conditions and promote a return to moderate economic growth." |