Federal Reserve officials yesterday slashed a key rate to an all-time low of at least .25 percent, signaling their intention of pumping life into the economy by also buying whatever long-term debt is necessary.

The Federal Open Market Committee action adjusted the target for the federal funds rate from 1 percent to between zero and .25 percent, unusual in that the panel typically cites a specific percent and not a range.

The statement also was somewhat longer than those in recent months, highlighting specific policy actions that the Fed was prepared to take now that there is virtually nothing further to do with the key interest rate.

"Since the Committee's last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined," the statement read.

"The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability."

The cut was somewhat deeper than the consensus .5 percentage-point cut many economists had predicted, many of whom had said that any change at this point was more symbolic than substantive. Indeed, the actual rate had been fluctuating well below the previous target of 1 percent, anyway.

Analysts such as Joe Balestrino, top fixed-income market strategist at Federated Investors in Pittsburgh, were focused not on the rate cut but the other actions the Fed is prepared to take.

"It's a Fed that's like the Oldsmobile ad: This isn't like your father's Fed," he said. "It's a new Fed and they were much more clear (in saying) in case you guys are falling asleep, this is what we're going to do."

The Fed didn't use the buzz phrase "quantitative easing," he said, and never will, but that is essentially the strategy the board is pursuing, he explained, when it reiterated that "it stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant."

By signaling such a commitment, Mr. Balestrino said, "They're basically saying we have an unlimited bank account and we are going to use it. It's into more creatively and directly putting money into the system."

Greg McBride, senior policy analyst at Bankrate.com, also focused on the quantitative easing and not the interest rate cut.

"On the consumer end, it really doesn't make a difference. At this point, another rate cut is more window dressing than anything else."

But he said debt purchases would be extremely effective in driving down borrowing costs.

Shortly before Thanksgiving, he said, the Fed announced a plan to buy up to $600 billion into mortgage-backed bonds. The result?

"Mortgage rates fell like a rock," Mr McBride said.

"It's the outside-the-box thinking by the Fed and the Treasury that has been the most productive," Mr. McBride said.

The federal rate has never been lower than 1 percent -- though Japan during the 1990s had set a rate of zero.

Some analysts worry that the Fed balance sheet is already bloated at $2.2 trillion, twice what it was last year. Also, rates this low can trigger deflation, the opposite problem that the Fed had been worried about earlier this year.

Mr. Balestrino isn't so inclined. "Is this the Japan of the '90s? I don't think we are," he said, saying that the Fed's multi-prong approach should preempt serious deflation.

The Fed's decision was matched by a reduction in the prime lending rate, the benchmark rate for millions of business and consumer loans.

The Fed's aggressive move was greeted enthusiastically by Wall Street. The Dow Jones industrial average rose about 350 points.

The announcement on the deployment of unconventional methods had been expected given that Fed officials have sought in recent comments to let financial markets know that the central bank will not be out of ammunition even with the funds rate at such low levels.

The Fed action came only hours after the government announced that consumer prices dropped by a record amount of 1.7 percent in November, reflecting a record decline in the price of gasoline and other energy products.