The Federal Reserve has cut US interest rates by a quarter-point to 2%, the latest in a series of cuts aimed at avoiding a deep economic slump.
Since September, the Fed has slashed its key rate by three full points from 5.25%, actions which take several months to have an economic impact.
The decision came after figures showing that the US economy grew at an annual rate of 0.6% in the first three months of this year. The figure was better than expected, but economists warned that a breakdown of the figures still pointed to continuing weakness in many areas, particularly housing and consumer spending.
The Federal Open Market Committee, which makes decisions on interest rates, said financial markets remained under stress and that there was 'considerable uncertainty' about the inflation outlook. It also said economic activity remains weak.
The panel, headed by Fed chairman Ben Bernanke, appeared to leave its options open for future interest rate moves, saying it would need to continue watching inflation moves closely, though it expected inflation to ease in the coming months.
