On an 8-2 vote, the Federal Reserve lowered the federal funds rate by a quarter percentage point, to 2.0 percent, citing a high level of uncertainty about inflation. The Fed expects that inflationary pressures from rising energy and commodity prices will level out somewhat, but increasing problems in the residential real estate markets and stressed financial and credit markets are still areas of concern. The discount rate was also reduced by a quarter percent, to 2.25 percent.
