By Paul Davidson
WASHINGTON – The Federal Reserve gave the U.S. economy a rare immunization shot Wednesday as it sought to extend a record 10-year-old expansion that faces mounting risks.
Despite a generally healthy economy, the Fed cut its key short-term interest rate for the first time in more than a decade in a bid to head off a possible recession spurred by global troubles and trade tensions.
As expected, the Fed lowered its federal funds rate by a quarter-percentage point to a range of 2% to 2.25%. The move is likely to ripple through the economy and financial system, nudging down rates for credit cards, home equity lines and auto loans and theoretically sparking more economic activity. While the rate cut should aid borrowers, it will frustrate savers who were just starting to benefit from higher bank account yields. Read more.