US interest rates slashed to 1%

US interest rates slashed to 1%

The Federal Reserve has cut its key interest rate from 1.5% to 1% in a widely expected move, as it aims to avoid a possible US recession.
Earlier this month the Fed cut rates from 2% to 1.5% in an emergency move, which was co-ordinated with five other central banks.
But the move did not boost US markets, with the Dow and S&P 500 closing down.
Interest rates have been slashed since September 2007, when the federal funds rate stood at 5.25%.
The 1% level - last seen between June 2003 and June 2004 - did not have a major effect on shares, as traders had already factored in the widely expected cut.
At close of trade in Wall Street, the Dow Jones was down 0.82%, or 74.16 points, at 8990.96. The S&P 500 was down 1.11%, or 10.42 points, at 930.09 and the Nasdaq was ahead 0.47%, or 7.74 points, at 1657.21.
'Moderate economic growth'
The rate cut move is confirmation that inflation is no longer seen as the major threat to the US economy.
Some analysts in fact fear that deflation could be a risk to the economy, as consumers delay any spending they can in the hope that products will be cheaper in the future.