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Fed cuts rates for second time in nine days

The Federal Reserve cut interest rates again last night in a second bid to avoid a recession in the US.

The central bank deliberated for two days but decided to reduce rates from 3.5 per cent to 3 per cent. Last week the cost of borrowing was slashed by .75 per cent from 4.25 to 3.5 which was the largest one-off cut for 25 years.

The Federal Open Market Committee said after the vote: “Financial markets remain under considerable stress and credit has tightened further for some businesses and households. Moreover, recent information indicates a deepening of the housing contraction as well as some softening in labour markets.”

M&G fund manager Richard Woolnough says: “The Federal Reserve is slashing interest rates very aggressively in view of the collapsing US housing market and the threat of economic growth falling sharply. US house prices fell 7.7 per cent in the year to the end of November 2007, the steepest fall since the index began in 1987. The Fed is acutely aware of the risks to the economy and it will be well aware that a falling US housing market has always historically resulted in or coincided with a recession.”


Annuity deal for smokers

Partnership is offering what is claims to be the most competitive smoker annuity available .The product offers people over 50 who have smoked at least 10 cigarettes a day for the past ten years a guaranteed income higher than a standard annuity. It is only available through IFAs, who can get quotes from The Exchange’s […]

Bank manager jailed as warning to fraudsters

A judge has told a crooked bank manager he was sending him to jail as a warning to others.Judge Nicholas Coleman told Robert Daniels, 35, a senior manager with HSBC in Peterborough, as he sentenced him to 18 months in jail: “The terms of this sentencing are not just to punish you and to prevent […]

Buffett meal

This year has got off to a disappointing start with falls across all global equity markets. The latest bout of volatility stems from continued concerns about the state of the US economy.


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