Delco reacts to slashing of key rate

Vicky Thomas
Delco Times

In an effort to restore stability to a faltering U.S. economy, the Federal Reserve slashed a key interest rate by three-quarters of a percentage point Tuesday while around Delaware County, some top economic minds expressed their views on the move.

The reduction in the federal funds rate from 4.25 down to 3.5 percent, the biggest funds rate cut on records going back to 1990 and marked the first time that the Fed has changed the funds rate between meetings since 2001, when the central bank was battling the combined impacts of a recession and the terrorist attacks.

“The Federal Reserve is very concerned that the economy is heading into a recession. In effort to stave that off, they’re cutting the funds rate,” said Keystone Research Center economist Mark Price. “It shows they’re concerned. They’re trying to send a signal that they’re not going to let this get out of hand.”

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