The Federal Reserve has cut a key interest rate by a quarter of a percentage point, seeking to stem the flow of bad news surrounding the U.S. economy.

The action pushes the federal funds rate down to 2 percent. That's its lowest level since late 2004. It's the seventh consecutive rate cut by the central bank since it started easing credit conditions last September to deal with the growing threat of a recession.

Analysts say the cut may be the last made by the Fed for some time.

In a statement accompanying the cut, the Federal Reserve Committee said that it "expects inflation to moderate in coming quarters, reflecting a projected leveling-out of energy and other commodity prices" and lowered pressure on resources.

But the panel also stated that "uncertainty about the inflation outlook remains high" and that it will monitor the economy closely for signs of rising inflation.

From NPR reports and The Associated Press.

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