The Federal Reserve added money to the nation's banking system Friday in a move many economists took as a clear signal that the central bank was lowering interest rates.
Many economists said they believe the Federal Reserve lowered the target for the federal funds rate - the rate banks charge one another on overnight loans - by a quarter of a percentage point to 3 percent.The Fed does not officially change the federal funds rate. However, analysts said the addition of reserves to the banking system left little doubt the Fed was cutting rates.
The move comes only hours after the Labor Department reported that employers cut 83,000 jobs from their payrolls in August.
"This is a very clear cut, decisive sign that the Federal Reserve is now targeting the federal funds rate at 3 percent in response to this destructive employment report," said economist Allen Sinai.