Fed cuts US interest rates to 3%

The Federal Reserve has cut interest rates for the second time in nine days as it tries to keep the US economy from entering a recession.

The central bank lowered rates to 3% from 3.5% after a two-day meeting.

Last week, the Fed slashed the cost of borrowing by the largest amount in 25 years in a shock move to calm tumbling global stock markets.

The Fed is hoping the cuts will cushion the US economy from the worst effects of the credit crunch and housing slump.

"Financial markets remain under considerable stress, and credit has tightened further for some businesses and households," the central bank's Federal Open Market Committee (FOMC) said.

"Moreover, recent information indicates a deepening of the housing contraction as well as some softening in labour markets."


http://news.bbc.co.uk/2/hi/business/7218055.stm