The Federal Reserve's Open Market Committee this afternoon cut the benchmark Federal Funds Rate by 25 basis points to 4.50% and its Discount Rate, also by 25 basis points, to 5%.

The cuts, which were expected by Wall Street, indicate that the Fed remains concerned over the slump in the housing market and its potential effect on the overall economy. However, the vote was not unanimous. Fed governor Thomas Hoenig cast his vote for leaving the rates as they were.

In a statement issued with the announcement of the cuts, the committee said, "Economic growth was solid in the third quarter, and strains in financial markets have eased somewhat on balance. However, the pace of economic expansion will likely slow in the near term, partly reflecting the intensification of the housing correction. Today's action, combined with the policy action taken in September, should help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and promote moderate growth over time."

The cuts were announced following a report from the Commerce Department that Gross Domestic Product grew at an unexpectedly robust annual rate of 3.9% in the third quarter, news which was taken by some analysts that the economy has remained inured to the effects of the recession in the housing sector. Residential investment, according to the Commerce Department, fell 20.1% in the third quarter, shaving a full point off overall GDP.

The Fed said in its statement that "inflation risks still remain." It added, "the upside risks to inflation roughly balance the downside risks to growth. The Committee will continue to assess the effects of financial and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth."

That part of the statement led Fed watchers to conclude that it was signaling the markets that they should not expect further rate cuts.

The cuts came during a day in which the price of oil futures hit a record $94 per barrel and the dollar hit new record lows.

Builder stocks immediately retreated on the news of the rate cuts as traders balanced the expected news of the cuts with the notion that the Fed was now done cutting.