The Federal Reserve has Brazil in 'major oil field' find ...
Euro tops $1.55 for first time ...
Ex-governor halts Nigeria probe ...
Germany's Revamped Federal Police Take on Terror Fight ...
India state disputes tiger count ... cut its key interest rate from 2.25% to 2.0% as it aims to avoid a possible US recession.

It is the seventh rate cut since last September, when the federal funds rate was cut from 5.25% to 4.75%.

Opinion was divided about whether the Federal Reserve's statement indicated that this would be the last cut in interest rates.

The economy has been hit by a housing market downturn and some analysts believe it is already in recession.

"Recent information indicates that economic activity remains weak," the Federal Reserve's rate-setting committee said in a statement.

"Financial markets remain under considerable stress, and tight credit conditions and the deepening housing contraction are likely to weigh on economic growth over the next few quarters."

'Downside risks'

But the statement did contain subtle indications that there may not be many more cuts to come.

In the statement announcing March's rate cut, the committee said that the action taken so far should help to promote growth, but warned that, "downside risks to growth remain".

The latest statement did not contain such a warning.

"The Fed was somewhat more dovish this time and they can easily go both ways from here," said Michael Woolfolk, at Bank of New York Mellon.

"People were expecting a clear sign that the next move would be a pause, but the statement doesn't make that clear."

The cut came despite figures showing the US economy had grown faster than expected in the first three months of 2008.

(BBC)

<< Back