A foreclosure sign is seen atop a sale sign for a house in Stockton, Calif., Saturday, Dec. 1, 2007. Home foreclosures soared to an all-time high in the final quarter of last year and are likely to keep on rising, underscoring the suffering of distressed homeowners and the growing danger the housing meltdown poses for the economy. (AP Photo/Marcio Jose Sanchez)
WASHINGTON (AP) - It isn't the full 1 percent interest rate cut that some observers had called for, but the Federal Reserve has cut
interest rates by three-quarters of a point.
The move takes the benchmark federal funds rate to 2 and a quarter percent, to try to stem the credit crisis that has continued to weaken the housing market and helped bring down Wall Street's Bear Stearns.
The central bank says the outlook for economic activity has weakened further and that financial markets remain under considerable stress.
It also says inflation has been elevated, but adds that pricing pressures should moderate.
Wall Street continues to send stock prices solidly higher. In the hour following the rate cut decision, the Dow was up more than 300 points.
(Copyright 2008 by The Associated Press. All Rights Reserved.)