Fed cuts key interest rate for a second time

WASHINGTON -- The Federal Reserve, confronted with surging oil prices and a slumping housing market, today cut a key interest rate by a quarter-point, the second rate reduction this year.

The central bank lowered the federal funds rate to 4.5 percent in an effort to stimulate economic activity and keep the country from dipping into a recession. The move will make it cheaper for consumers and businesses to borrow money.

The Fed's action came on the same day the government announced that the overall economy grew at a stronger-than-expected 3.9 percent rate in the July-September quarter.

However, economists are worried that growth will be less than half that amount in the current quarter as the country struggles with a deepening housing slump.