The Federal Reserve has cut short-term interest rates by a half-point, the second cut in the past eight days. The benchmark is now 3 percent. In a statement announcing the cut, the Fed's Open Market Committee said, "Today's policy action, combined with those taken earlier, should help to promote moderate growth over time and to mitigate the risks to economic activity." The committee also expressed concern over continuing stress in the financial markets and tightening credit for businesses and households. "The Committee will continue to assess the affects of financial and other developments on economic prospects," said the committee, "and will act in a timely manner as needed to address those risks." At the same time, the Fed's Board of Governors reduced the discount rate, the amount banks pay to borrow directly from the Fed, to 3.5 percent.
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