INSTANT VIEW - Federal Reserve cuts key rate 1/4 point

NEW YORK (Reuters) - The Federal Reserve lowered a key U.S. interest rate by a modest quarter percentage point on Wednesday in what may be the last of a series of cuts aimed at aiding an economy hit hard by a housing slump and credit market turmoil.

KEY POINTS: * The Fed's action takes the bellwether federal funds rate to 2 percent, the lowest since December 2004. * It was the seventh reduction in a campaign that has brought rates down by 3.25 percentage points since mid-September. * Fed says uncertainty about inflation outlook remains high. * Fed says readings on core inflation somewhat improved, but energy, commodity prices up. * Fed says expects inflation to moderate in coming quarters

COMMENTS:

ERIC KUBY, CHIEF INVESTMENT OFFICER, NORTH STAR INVESTMENT

MANAGEMENT CORP, CHICAGO:

"It seems that what people were concerned about was language that suggests this is the end of the rate cuts, and it seems as if that sort of language wasn't in the (statement).

"Everything I heard coming into today was there could be signals of a pause, and it's not seeming like that language was in there, so I think that's what people are reacting to."

"Today, you had pretty good corporate earnings going into the day, and on top of that you had Fed speak that didn't dampen the rally, so it seems to be what people hoped for."

JOSEPH BALESTRINO, FIXED INCOME MARKET STRATEGIST, FEDERATED