The Federal Reserve Board cut the federal funds rate target 75 basis points to 3.50% yesterday, ahead of its meeting next week.

A statement from the Fed, which announced the cut, said the Federal Open Market Committee “took this action in view of a weakening of the economic outlook and increasing downside risks to growth. While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households. Moreover, incoming information indicates a deepening of the housing contraction as well as some softening in labor markets.”

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