Interest Rates: More Cuts To Come?

By: Associated Press Email
By: Associated Press Email
The Fed

** FILE ** In this April 3, 2008 file photo, Federal Reserve Chairman Ben Bernanke testifies on Capitol Hill in Washington. With inflation moving higher on its worry list, the Federal Reserve held interest rates steady Wednesday, June 25, 2008, ending nearly a year of cuts to bolster the economy, and hinted that the next direction for rates could be up. (AP Photos/Susan Walsh, File)

Washington (AP) The Fed's move to cut interest rates this week may not be its last this year.

Yesterday's half-point cut in the federal funds rate to 1 percent puts it at a level seen only once before in the last half-century.

The rate is that which banks charge each other for overnight loans, but is usually reflected quickly in other banking products.

The fed could cut rates again when it meets in December, but such a move comes with some risk.

Some economists are leery of going too low, too quickly. If the central bank leaves the rate untouched, it would save an important monetary tool in case the economic trouble gets worse.

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