federal reserve

Timeline: The federal funds rate at work

 

1980 Federal Funds Rate 1980 Federal Funds Rate 1984 Federal Funds Rate 2003 Federal Funds Rate 2008 Federal Funds Rate 2012 Federal Funds Rate 2007 Federal Funds Rate 1993 Federal Funds Rate 1981 Federal Funds Rate 1974 Federal Funds Rate

Year: 2008

Rate: Decreases to a range of zero percent to 0.25 percent

The details: The country is gripped by financial crisis as the housing bubble bursts, the investment bank Lehman Brothers fails in September, and the stock market takes a nose dive. During the year, people lose their jobs in droves, credit dries up for small businesses and consumer confidence crumbles. President Barack Obama is elected in November; he will face a full-blown recession when he takes office in 2009.

The Fed responds aggressively to the financial turmoil by lowering the federal funds rate, desperately trying to stimulate the economy. It pushes the federal funds rate in December to its lowest level in more than 50 years.

 

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