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Economy in Brief

FOMC Lowers Fed Funds Rate by 25 Basis Points
by Tom Moeller April 30, 2008

The Federal Open Market Committee again lowered the Federal funds rate today by 25 basis points to 2.00% in a move that was widely expected. The funds rate was last this low in December, 2004.

The discount rate was lowered another 25 basis points to 2.25%.

The Fed indicated "Recent information indicates that economic activity remains weak. Household and business spending has been subdued and labor markets have softened further."

Regarding price inflation it was stated "Although readings on core inflation have improved somewhat, energy and other commodity prices have increased, and some indicators of inflation expectations have risen in recent months."

Voting against taking the action was Richard W. Fisher, President of the Federal Reserve Bank of Dallas and Charles I. Plosser, President of the Philadelphia Fed, who preferred no change in rates.

For the complete text of the Fed's latest press release please follow this link.

Are Global Imbalances Due to Financial Underdevelopment in Emerging Economies? from the Federal Reserve Bank of San Francisco is available here.

  Current Last March 2007 2006 2005
Federal Funds Rate, % (Target) 2.00 2.25 2.64 5.05 4.96 3.19
Discount Rate, % 2.25 2.50 3.17 5.88 5.95 4.18
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