Fed Lowers Rate By 25 Basis Points

Newman, Emily
June 2003
Bond Buyer;6/26/2003, Vol. 344 Issue 31665, p2
Trade Publication
In a move that brings target interest rates to their lowest levels since 1958, U.S. Federal Reserve Board policymakers on June 25, 2003 cut the federal funds rate by a quarter point to 1.00% and determined the bias was weighted toward a fall in inflation, following a weak bias in May. In a related action, the Federal Board of Governors approved a 25 basis point cut in the discount rate, to 2%. The funds rate is the Federal's main tool for influencing the economy, and especially for stimulating it in response to pessimistic economic indicators that have sparked fears of deflation. Core inflation rose a very weak 1.6% over the 12 months ended May, and data for the year ended in April was the lowest since 1966. Unemployment, which reached 6.1% last month, is also a market concern.


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