Fed Cuts Rates 50bp

They Did It!!!

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U.S. Federal Open Market Committee Statement: Text2007-09-18 14:15 (New York)

Sept. 18 (Bloomberg) -- The following is the full text ofthe statement released today by the Federal Reserve:

The Federal Open Market Committee decided today to lowerits target for the federal funds rate 50 basis points to 4 3/4percent.

Economic growth was moderate during the first half of theyear, but the tightening of credit conditions has the potentialto intensify the housing correction and to restrain economicgrowth more generally. Today's action is intended to helpforestall some of the adverse effects on the broader economythat might otherwise arise from the disruptions in financialmarkets and to promote moderate growth over time.

Readings on core inflation have improved modestly thisyear. However, the Committee judges that some inflation risksremain, and it will continue to monitor inflation developmentscarefully.

Developments in financial markets since the Committee'slast regular meeting have increased the uncertainty surroundingthe economic outlook. The Committee will continue to assess theeffects of these and other developments on economic prospectsand will act as needed to foster price stability andsustainable economic growth.

Voting for the FOMC monetary policy action were: Ben S.Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; ThomasM. Hoenig; Donald L. Kohn; Randall S. Kroszner; Frederic S.Mishkin; Charles L. Evans; William Poole; Eric S. Rosengren;and Kevin M. Warsh.

In a related action, the Board of Governors unanimouslyapproved a 50 basis point decrease in the discount rate to 51/4 percent. In taking this action, the Board approved therequests submitted by the Boards of Directors of the FederalReserve banks of Boston, New York, Cleveland, St. Louis,Minneapolis, Kansas City and San Francisco.

--Washington newsroom +1-202-624-1820

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