In an indication that the Federal Reserve sees an increased risk of recession, a committee that sets monetary policy cut two key short-term interest rates today by half a percentage point. The Federal Open Market Committee's decision to slash its target for the federal funds overnight rate to 3 percent, and the discount rate to 3.5 percent, was not unexpected. But coming on the heels of an unscheduled 75-basis-point cut in both rates Jan. 22, the 1.25 percent reduction the Fed has undertaken in just eight days surpasses short-term interest-rate cuts made in all of 2007. "Financial markets remain under considerable stress, and credit has tightened further for some businesses and households," members of the committee said in a statement. "Moreover, recent information indicates a ...
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