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October 8th, 2008 (Modified on June 16th, 2017)

Early-Morning Rate Cuts Galore



The Federal Reserve cut its target for the Federal Funds rate to 1.50% this morning. The between-meeting move wasn’t entirely unexpected, but it came as part of a coordinated campaign to ease monetary policy:

The world’s major central banks moved in concert Wednesday to slash key interest rates, easing monetary policy around the globe in an ongoing struggle to head off financial turmoil that has threatened to flatten the international economy.
The coordinated rate moves saw the Fed cut its key lending rate by half a percentage point, to 1.5%.

The European Central Bank trimmed its key refi rate to 3.75% from 4.25%, while the Bank of England cut its key rate to 4.5% from 5%. The Bank of Japan sat out the move but issued a statement backing the action. The Bank of Canada, the Swiss National Bank and the Swedish Riksbank cut rates as well.

The Fed also cut the discount rate by a half percent to 1.75%.

Such coordinated rate cuts are few and far between; this was the first such move since the aftermath of the 9/11 attacks.

UPDATE: Since several people have emailed (you can comment, you know!) to ask about the Prime Rate. A growing number of banks have already adopted a 4.50% Prime, but the new rate won’t be official until it’s published in The Wall Street Journal tomorrow.

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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