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Monetary Policy

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Fed Drops Key Rate to 2 Percent; Signals Likely Pause Ahead 

Apr 30, 2008By

The Federal Reserve voted Wednesday, as expected, to cut the federal funds target rate 25 basis points to 2 percent; the cut was largely within investor expectations, leading Wall Street higher as the Dow Jones Industrial Average added slightly to earlier gains in Wednesday’s trading session. The latest cut comes as rising concerns about inflation have many expecting a pause to future rate cuts; the Fed has cut rates seven times since last summer, by a total of three percentage points.