WASHINGTON -- The Federal Reserve, citing continued sluggishness in the supply of money and credit as well as lower inflation, slashed short-term interest rates again yesterday in two separate actions that brought bank borrowing costs to their lowest level in nearly 20 years.

The Fed sliced the discount rate to 4.5% from 5%, and Fed officials let the federal funds rate slip from 5% to 4.75%. Bond market analysts said they believe the rate cuts -- quickly followed by a reduction by major commercial banks in the prime lending rate to 7.5% from 8% -- will provide some stimulus to a faltering U.S. economy by lowering the cost of credit to businesses and consumers.

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