Fed drops key interest rate by 3/4 point

The cut – the sixth in six months – brings the rate to 2.25 percent.

The Fed pointed to weakening economic activity for its decision, with factors at play including slow growth in consumer spending, softening labor markets, stress on financial markets, tightening of credit conditions and further declines in the housing market, according to the Fed’s statement.

“(This) policy action, combined with those taken earlier, including measures to foster market liquidity, should help to promote moderate growth over time and to mitigate the risks to economic activity,” the Fed said.