FOMC Statement

Release Date: October 8, 2008

For release at 7:00 a.m. EDT

Joint Statement by Central Banks

Throughout the current financial crisis, central banks have engaged in continuous close consultation

and have cooperated in unprecedented joint actions such as the provision of liquidity to reduce

strains in financial markets.

Inflationary pressures have started to moderate in a number of countries, partly reflecting a marked

decline in energy and other commodity prices. Inflation expectations are diminishing and remain

anchored to price stability. The recent intensification of the financial crisis has augmented the

downside risks to growth and thus has diminished further the upside risks to price stability.

Some easing of global monetary conditions is therefore warranted. Accordingly, the Bank of

Canada, the Bank of England, the European Central Bank, the Federal Reserve, Sveriges Riksbank,

and the Swiss National Bank are today announcing reductions in policy interest rates. The Bank of

Japan expresses its strong support of these policy actions.

Federal Reserve Actions

The Federal Open Market Committee has decided to lower its target for the federal funds rate 50

basis points to 1-1/2 percent. The Committee took this action in light of evidence pointing to a

weakening of economic activity and a reduction in inflationary pressures.

Incoming economic data suggest that the pace of economic activity has slowed markedly in recent

months. Moreover, the intensification of financial market turmoil is likely to exert additional

restraint on spending, partly by further reducing the ability of households and businesses to obtain

credit. Inflation has been high, but the Committee believes that the decline in energy and other

commodity prices and the weaker prospects for economic activity have reduced the upside risks to

inflation.

The Committee will monitor economic and financial developments carefully and will act as needed

to promote sustainable economic growth and price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F.

Geithner, Vice Chairman; Elizabeth A. Duke; Richard W. Fisher; Donald L. Kohn; Randall S.

Kroszner; Sandra Pianalto; Charles I. Plosser; Gary H. Stern; and Kevin M. Warsh.

In a related action, the Board of Governors unanimously approved a 50-basis-point decrease in the

discount rate to 1-3/4 percent. In taking this action, the Board approved the request submitted by

the Board of Directors of the Federal Reserve Bank of Boston.

Information on Actions Taken by Other Central Banks

Information on the actions that will be taken by other central banks is available at the following

websites:

Bank of Canada

Bank of England

European Central Bank

Sveriges Riksbank (Bank of Sweden)

Swiss National Bank (68 KB PDF)

Statements by Other Central Banks

Bank of Japan (79 KB PDF)