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Wednesday, January 30, 2008

Fed Expected to Cut Rates Another Half Point, to 3%

January 30 2008

The Federal Reserve is expected to lower U.S. interest rates another half-point Wednesday as part of an ongoing aggressive effort to spare the economy from the worst effects of a deep housing slump and credit crunch. Financial markets saw an 80 percent chance the Fed would lower benchmark overnight rates by a steep half-percentage point after a weak reading on fourth-quarter economic growth was released Wednesday, as the central bank seeks to counter the risk of a U.S. recession. Weaker consumer confidence and spending data, along with rising housing inventories and plunging home prices, may have kept Fed officials concerned about downside risks to growth, economists explain.

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