Fed cuts rates to 4.5%

Fed cuts rates to 4.5%, an article from CNNMoney.com, reports that the Federal Reserve lowered the critical short-term interest rate by a quarter of a point Wednesday, citing continued concerns about weakness in the housing market. The Fed indicated that it is also worried about inflation, which could be a sign that the central bank may be reluctant to cut rates again at its next meeting in December. The move leaves the federal funds rate at 4.5%, its lowest level since January 2006. Many investors believed the Fed would lower rates in an attempt to limit the mortgage meltdown's spillover into the broader economy. The Fed said in a statement that it felt Wednesday's action, along with the rate cut in September, "should help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets."