Discount Rate Reduced by 50 Basis Points
To All Depository Institutions in the Second Federal Reserve District:
At its meeting today, the Federal Open Market Committee decided to lower its target for the federal funds rate by 50 basis points, to 5½ percent. In addition, the Board of Governors of the Federal Reserve System approved a 50-basis-point reduction in the discount rate, to 5 percent.
The announcement indicated that "consumer and business confidence has eroded further, exacerbated by rising energy costs that continue to drain consumer purchasing power and press on business profit margins."