Fed Cuts Another Quarter Point

The central bank has reduced the federal funds rate (what banks charge each other for overnight loans) to 4.5% and discount rate (what the Fed charges banks for short-term loans) to 5% to prevent the country from going into a recession. This was announced amid government's report that the economy grew at 3.9% in 3Q.

Consumer spending, which is responsible for 2/3 of the US economic activity, is showing signs of weakening, even though 3Q consumer confidence rose at 3% rate.

Employment looks more robust, with a government report showed that 110k jobs were added in Sept, while Aug hiring figure was revised from a loss of 4k to a gain of 89k.

* CNBC-Fed , MktWatch-Fed , Reuters-Fed *