1、Order Code 98-856 EUpdated October 29, 2008Federal Reserve Interest Rate Changes: 2001-2008Marc Labonte and Gail E. Makinen Government and Finance DivisionSummaryThe Federal Open Market Committee (FOMC) decided at its scheduled meetingheld on October 29 to lower the target rate for federal funds to
2、1% from 1% set at itsunscheduled meeting of October 8, 2008. In making its decision to reduce the target,the FOMC stressed the following factors: (1) the pace of economic growth appears tohave slowed markedly owing importantly to a softening of consumer spending; (2)business equipment spending and i
3、ndustrial production have weakened; (3) economicslowdowns abroad have dampened the prospects for U.S. exports; (4) intensified strainsin financial markets are also likely to further reduce spending; and (5) inflation prospectshave improved due to declines in energy and other commodity prices. Becaus
4、e of theinternational scope of the financial turmoil, the downside risks to growth remain.Nevertheless, the FOMC believes that the substantial easing of monetary policy to date,combined with other measures to provide liquidity to the financial system, should helpto promote moderate growth over time.
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