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Message: Pre-Market Interest Rate Cut
Fed Cuts Key Interest RateAsian Markets Tumble On U.S. WorriesPOSTED: 2:31 am CST January 22, 2008UPDATED: 7:51 am CST January 22, 2008
The Federal Reserve has decided to lower its target for the federal funds rate three-quarters of a point to 3.5 percent.
In a statement on its Web site, the Federal Reserve took the action in view of a weakening economic outlook and increasing downside risks to growth.
"While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households," the statement said. "Moreover, incoming information indicates a deepening of the housing contraction as well as some softening in labor markets."
The move came as global stock markets extended their shakeout into a second day on Tuesday.
The declines in Asia come amid worries that a possible U.S. recession could cause a worldwide economic slowdown. The drops have spread to the Dow futures index, which as of 8 a.m. EST, was down 553 points, or more than 4 percent.
Aiding in the Dow worries was Bank of America's Tuesday morning announcement that its fourth-quarter earnings fell sharply, hurt by mounting credit losses and weak investment banking results.
Net income at the Charlotte-based bank declined to $268 million, or 5 cents per share, in the three months ended Dec. 31 from $5.26 billion, or $1.16 per share, a year ago.
The bank's revenue fell 32 percent to $12.67 billion from $18.49 billion last year.
Japan's benchmark Nikkei index was down 5.65 percent at the close after dropping almost 4 percent Monday.
Trading was halted in India when the Sensex index plummeted almost 10 percent within minutes of opening. Hong Kong's Hang Seng index dropped 8 percent by midday after diving 5.5 percent the day before.
A senior economist in Tokyo said chances are slim for stocks to bounce back without some positive -- even "drastic" -- measures from the U.S. government.
Oil prices have declined amid expectations that slower U.S. growth will weaken demand for crude.
The U.S. markets were closed Monday in observance of the Martin Luther King Jr. holiday.
The Federal Reserve has decided to lower its target for the federal funds rate three-quarters of a point to 3.5 percent.
In a statement on its Web site, the Federal Reserve took the action in view of a weakening economic outlook and increasing downside risks to growth.
"While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households," the statement said. "Moreover, incoming information indicates a deepening of the housing contraction as well as some softening in labor markets."
The move came as global stock markets extended their shakeout into a second day on Tuesday.
The declines in Asia come amid worries that a possible U.S. recession could cause a worldwide economic slowdown. The drops have spread to the Dow futures index, which as of 8 a.m. EST, was down 553 points, or more than 4 percent.
Aiding in the Dow worries was Bank of America's Tuesday morning announcement that its fourth-quarter earnings fell sharply, hurt by mounting credit losses and weak investment banking results.
Net income at the Charlotte-based bank declined to $268 million, or 5 cents per share, in the three months ended Dec. 31 from $5.26 billion, or $1.16 per share, a year ago.
The bank's revenue fell 32 percent to $12.67 billion from $18.49 billion last year.
Japan's benchmark Nikkei index was down 5.65 percent at the close after dropping almost 4 percent Monday.
Trading was halted in India when the Sensex index plummeted almost 10 percent within minutes of opening. Hong Kong's Hang Seng index dropped 8 percent by midday after diving 5.5 percent the day before.
A senior economist in Tokyo said chances are slim for stocks to bounce back without some positive -- even "drastic" -- measures from the U.S. government.
Oil prices have declined amid expectations that slower U.S. growth will weaken demand for crude.
The U.S. markets were closed Monday in observance of the Martin Luther King Jr. holiday.
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