Fed cuts US rates to 2.25% as it fights slump

In a move to fight further market turmoil, the Federal Open Market Committee (FOMC) voted eight to two for the latest rate cut, the fifth drop since mid-September 2007. Some analysts had predicted the Fed would cut rates by as much as 100 basis points to 2%, in order to revive the ailing economy. “Recent information indicates that the outlook for economic activity has weakened further. Growth in consumer spending has slowed and labour markets have softened,” the FOMC statement reads. “Financial markets remain under considerable stress, and the tightening of credit conditions and the d...