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The Fed's Rate Cut

September 21, 2007

The Federal Open Market Committee (FOMC) lowered its target for the federal funds rate 50 basis points to 4.75 percent.

This cut took place during the FOMC meeting on Sept. 18. It is aimed to promote economical growth in light of the recent economical troubles sparked by the fall of the subprime mortgage market.

The Committee will continue to assess the effects of economical developments and will act as needed to aid in price stability and sustainable economic growth.

In a related action, the Board of Governors unanimously approved a 50-basis-point decrease in the discount rate to 5.25 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Cleveland, St. Louis, Minneapolis, Kansas City and San Francisco.

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