Fed Cuts By Half Point to 1%
Citing a “marked” slowing in economic activity due to a decline in consumer spending, the Federal Open Market Committee (FOMC) of the Federal Reserve Board announced its decision to lower its Fed funds rate by 50 basis points to 1%.
The decision to lower the rate by 50 basis points was unanimous. The FOMC added that it believed that “market turmoil” was likely to further slow spending, but that its actions would help improve credit conditions.
The FOMC also noted that it believed inflation would probably moderate in coming quarters going into 2009.
Stocks had been moving higher in anticipation of a rate cut. The only questions in the minds of traders and investors were how deep the Fed would cut and what language would accompany the move. Going into the Fed announcement, the Nasdaq was the percentage leader on the day, followed by the S&P 500. Among the bigger gainers were gold stocks such as Yamana Gold
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Nasdaq gainers included Apple
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Stocks moved lower immediately after the announcement, with the S&P 500 and Dow Industrials slipping into the red for the first time in the session.
Be sure to check back with TradingMarkets.com for our Stock Market Recap, 7 Stocks You Need to Know and 7 ETFs You Need to Know later today in order to be prepared for the market’s reaction to the Fed’s move today, tomorrow and in the days to come.
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