U.S. Fed Cuts Rates Quarter-Point

The U.S. Federal Reserve cut short-term interest rates by a quarter-point to 4.5 percent Wednesday, as many on Wall Street expected.

But the Federal Open Market Committee vote, on the heels of a half-point cut Sept. 18, was not unanimous, and an accompanying statement sought to lower expectations of additional cuts any time soon.

The committee judges that, after this action, the upside risks to inflation roughly balance the downside risks to growth, the committee said.

The committee will continue to assess the effects of financial and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth, the statement continued.

The statement said core inflation, excluding volatile energy and food prices, had improved modestly this year, but rising energy and commodity prices might push inflation up again.

It also said, Economic growth was solid in the third quarter, and strains in financial markets have eased somewhat on balance. But it said the growth pace would likely slow in the near term, partly reflecting the intensification of the housing correction.

The one committee member who voted against the rate cut was Federal Reserve Bank of Kansas City President Thomas Hoenig, the central bank said.