The known: the Federal Reserve has cut both its benchmark interest rate and discount rate by 25 basis points (a quarter percent) while signaling that further cuts are unlikely.
“Today’s action, combined with the policy action taken in September, should help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets,” the Federal Open Market Committee said in a statement after meeting today in Washington. “After this action, the upside risks to inflation roughly balance the downside risks to growth.”
The big unknown(s): will the cuts help revive our national housing market? And of course, what impact (if any) will the cuts have on mortgage rates closer to home?
∙ Fed Lowers Rate by a Quarter Point to 4.5 Percent [Bloomberg]
∙ U.S. Federal Open Market Committee Statement: Text [Bloomberg]