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April 30th, 2008
Posted: 02:27 PM ET
NEW YORK (CNNMoney.com) — The Federal Reserve cut its key interest rate by a quarter percentage point Wednesday, but the central bank’s statement signaled it may be the last rate cut for at least a while. The cut took the federal funds rate, the key overnight rate at which banks loan money to one another, to 2 percent. It had been at 5.25 percent as recently as September, when the Fed started slashing rates in an effort to spur the economy and keep the nation out of recession. The federal funds rate is a benchmark for home equity lines of credit, credit cards and other consumer loans as well as the prime rate used for short-term business loans. But the Fed’s statement suggested that it needs to continue to closely monitor inflation pressures and it dropped its previous mention of downside risks to growth. Experts generally believe that type of language signals the central bank is ready to pause for some time. |
 
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