Fed Cuts Rates 50bp, As Expected

U.S. Federal Open Market Committee's Oct. 29 Statement: Text
2008-10-29 18:18:05.160 GMT

Oct. 29 (Bloomberg) -- The following is the full text of the
statement released today by the Federal Reserve in Washington:
The Federal Open Market Committee decided today to lower its
target for the federal funds rate 50 basis points to 1 percent.
The pace of economic activity appears to have slowed markedly,
owing importantly to a decline in consumer expenditures. Business
equipment spending and industrial production have weakened in
recent months, and slowing economic activity in many foreign
economies is damping the prospects for U.S. exports. Moreover,
the intensification of market turmoil is likely to exert
additional restraint on spending, partly by further reducing the
ability of households and businesses to obtain credit.
In light of the declines in the prices of energy and other
commodities and the weaker prospects for economic activity, the
Committee expects inflation to moderate in coming quarters to
levels consistent with price stability.
Recent policy actions, including today's rate reduction,
coordinated interest-rate cuts by central banks, extraordinary
liquidity measures, and official steps to strengthen financial
systems, should help over time to improve credit conditions and
promote a return to moderate economic growth. Nevertheless,
downside risks to growth remain. The Committee will monitor
economic and financial developments carefully and will act as
needed to promote sustainable economic growth and price
stability.
Voting for the FOMC monetary policy action were: Ben S. Bernanke,
Chairman; Timothy F. Geithner, Vice Chairman; Elizabeth A. Duke;
Richard W. Fisher; Donald L. Kohn; Randall S. Kroszner; Sandra
Pianalto; Charles I. Plosser; Gary H. Stern; and Kevin M. Warsh.
In a related action, the Board of Governors unanimously approved
a 50-basis-point decrease in the discount rate to 1-1/4 percent.
In taking this action, the Board approved the request submitted
by the Board of Directors of the Federal Reserve Bank of Boston,
New York, Cleveland and San Francisco.
--Washington newsroom +1-202-624-1820. Editor: Chris Anstey