Fed saw faster slowdown

Fed saw faster slowdown
FOMC minutes show January's second cut reflected accelerating U.S. slowdown
March 22, 2001: 2:54 p.m. ET


WASHINGTON (Reuters) - Federal Reserve policymakers decided unanimously to cut U.S. interest rates aggressively for a second time in January because the economy was slowing faster than expected, minutes of a policy meeting released Thursday show.

Members of the Federal Open Market Committee voted 10-0 at the conclusion of a two-day meeting Jan. 31 to lower interest rates a half-percentage point, matching a half-point reduction announced Jan. 3 in between regular meetings.

"The speed and extent of the slowdown were much more pronounced than they had anticipated," the Fed minutes said. The policymakers felt "the eventual degree and duration of the softening in economic conditions were difficult to predict."

The Fed members met again last Tuesday week and reduced interest rates another half-percentage point, saying they were closely monitoring economic conditions, an apparent sign that the U.S. central bank is ready to reduce rates any time if necessary to keep the record expansion on track.