Sen. Dodd: More action needed by policy-makers

WASHINGTON (Reuters) - Senate Banking Committee Chairman Christopher Dodd, in response to a rare, emergency Federal Reserve interest rate cut, said on Tuesday more action is needed to aid housing and financial markets.

The Connecticut Democrat also said the fiscal stimulus package that Congress will soon consider needs to address the problems in the housing and credit markets.

He added he plans to meet "in the coming days" with Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke to discuss restoring long-term growth and stability to the U.S. economy.

The Fed on Tuesday slashed a key interest rate by a hefty three-quarter of a percentage point because it sees a weakening economic outlook and increasing downside to risks to growth.

"While the Fed's inter-meeting rate cut, its first since right after the tragedy of September 11, is an immediate response, more action from policy makers is needed to help restore investor confidence and ease financial strains on homeowners," Dodd said.

Dodd said other steps required for economic stability is passing legislation to reform the Federal Housing Authority, halt predatory lending and give the big mortgage finance companies like Fannie Mae and Freddie Mac the ability to promote more affordable home ownership.

(Reporting by John Poirier; Editing by Neil Stempleman)