“The Federal Open Market Committee has decided to lower its target for the federal funds rate 50 basis points t0 1 11/2 percent. The Committee took this action in light of evidence pointing to a weakening of economic activity and a reduction in inflationary pressures. Incoming economic data suggest that the epace of economic activity has slowed markedly in recent months. Moreover, the intensification of the financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit. Inflation has been high, but the Committee believes that the decline in energy and other commodity prices and the weaker prospects for economic activity have reduced the upside risks for inflation.

The Committee will monitor economic and financial developments carefully and will act as needed to promote economic growth and stable prices.

Votes for the action. Mr. Bernanke, Mr. Geithner, Ms. Duke. Mr. Fisher, Mr. Kohn, Mr. Koszner, Mr. Plosser, Mr Stern and Mr. Warsh

Voting against the Action : None

According to the source, what type of policy did the Fed use in October 2008?

A. Expansionary, Fiscal

B. Contractionary, Monetary

C. Contractionary, Fiscal

D. Expansionary, Monetary