U.S. central bank policy makers have decided to lower a key interest rate for the first time in four years, in an effort to help the economy avoid recession.
In a statement, the Federal Reserve's Open Market Committee said developments in financial markets have increased the uncertainty surrounding the U. S. economic outlook. It lowered the federal funds rate by one-half of one percent to four-and-three quarters percent.
The federal funds rate determines the cost that banks pay to borrow from each other. It is the Fed's main tool for influencing the U.S. economy. Investors had been looking for a rate cut to calm financial markets, which have been unsteady on housing and credit problems.