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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Today's weak report on 2nd quarter gross domestic product is welcome news for mortgage shoppers.
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