Fed Cuts Interest Rate a Half-Point, to 1.5%
The Federal Reserve, in an emergency unscheduled meeting Wednesday, cut the key U.S. interest rate by half a percentage point in an effort to bolster the faltering U.S. economy.
Acting in concert with global banks, the Fed lowered its key interest rate to 1.5%, from 2%, ahead of its next regularly scheduled meeting in late October.
Separately, the Fed said it would lend directly to U.S. corporations, bypassing ailing banks, in the first such action since the Great Depression, the Wall Street Journal reported Wednesday.
Equivalent banks in Canada, England and the European Central Bank also set reductions in policy interest rates Wednesday, and the Bank of Japan expressed support of the measures, the Fed said in a statement.
China also cut its key interest rates today for a second time in less than one month to stimulate slowing economic growth amid the global credit crisis, the Associated Press reported.
Last month, the Fed held the federal funds rate — the interest that banks charge each other — at 2% for the third straight time, keeping it at its lowest point since late 2004.
