California Business Minute™

Hi, I am Tim Johnson and welcome to the California Business Minute.

The Open Market Committee of the Federal Reserve cut interest rates by
one-quarter point to 4.25 percent for short term interest and for the discount
rate yielding 4.75 percent.

In a written statement from the Committee it identified that the ‘Incoming information
suggests that economic growth is slowing, reflecting the intensification of the housing
correction and some softening in business and consumer spending.  Moreover, strains
in financial markets have increased in recent weeks.  Today’s action, combined with the
 policy actions taken earlier, should help promote moderate growth over time.’

Stocks fell yesterday shortly after the announcement. The Dow industrials nearly 300
points on the New York Stock Exchange as investors were disappointed by the Fed’s
commentary not being exactly upbeat while other Wall Street investors had hoped for a
larger reduction in the rates.

I am Tim Johnson and this has been the California Business Minute.