FOMC Cuts the US Fed Funds Rate 0.25% to 2.00%
April 30 2008
Today saw the Federal Reserve cut the Fed Funds rate by 25bps, inline with market expectations. The Fed Funds rate now stands at 2.00%, a level not seen since December 2004. In the accompanying commentary the Fed suggested that they will now take a data dependant stance highlighting that they “will continue to monitor economic growth, financial developments, and act as needed to promote growth.” Markets were looking for the tone of the statement to suggest a neutral stance; however the continued presence of a mild dovish bias ensured that the market was slightly disappointed. Following the announcement the U.S. dollar fell 0.6% against a basket of currencies.