The Committee took further action at its next scheduled meeting, on September 18, when it cut its target for the federal funds rate 50 basis points. This action was intended as a counterbalance to the tightening of credit conditions and to address in a preemptive fashion some of the risks that financial developments posed to the broader economy.
The Committee met most recently on October 30-31. The data reviewed at that meeting suggested that growth in the third quarter had been solid – at a 3.9 percent rate, according to the initial estimate by the Bureau of Economic Analysis. Residential construction declined sharply during the quarter, as expected, subtracting about 1 percentage point from overall growth.