Members of the Federal Reserve's federal open market committee today sliced a key interest rate by 1/4 point, pushing it down to 2 percent.

"Household and business spending has been subdued, and labor markets have softened further. Financial markets remain under considerable stress, and tight credit conditions and the deepening housing contraction are likely to weigh on economic growth over the next few quarters," the committee explained in a statement.

The decision to cut the federal funds rate, which is the interest banks charge on short-term loans to each other, was not unanimous. As in March, committee members Richard W. Fisher and Charles I. Plosser broke from the majority, this month advocating to keep the federal funds rate the same. (In March, the pair advocated for a smaller rate cut than the 3/4 point reduction eventually chosen by the committee.)

Alison Rice is a contributing editor to BUILDER Online.