On Tuesday, September 19, 2007 the Federal Open Market Committee reduced its Fed Funds Rate by a half percent. The Fed Funds Rate is the overnight rate at which banks lend to each other which, with today’s action, is now 4.75 percent. This was the first reduction of the rate in more than three years. Most believe that the Fed dropped the rate in response to the current credit turmoil and to help stabilize the housing sector. “The Federal Reserve today took an aggressive stance toward injecting money into the economy with a half-percent reduction in the Fed Funds Rate,” said Quicken Loans Chief Economist Bob Walters. “It was widely accepted that the Fed would cut the rate, but most expected a quarter percent reduction. With this decision, the Fed is acknowledging that the consumer credit situation needs serious attention.” Secrets of the Temple: How the Federal Reserve Runs the Country

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