US Fed Unexpectedly Lowers Key Interest RateIn a surprise move aimed at averting a serious economic downturn, the Federal Reserve cut a key interest rate by a half-point today. Not since the Asian currency crisis in late 1998 has the central bank altered its policy in between regularly scheduled meetings of its interest rate committee.The Fed cut its target for the federal funds rate -- the interest banks charge each other on overnight loans -- to 6 percent from 6.5 percent, a nine-year high. It also cut its mostly symbolic discount rate by a quarter point to 5.75 percent. The Fed said it stands ready to cut the discount rate by another quarter point to 5.50 percent on the request of Federal Reserve banks. A stock market weary of bad surprises reacted euphorically. Within minutes, the Nasdaq index more than made up for Tuesday's 7 percent loss. The Dow Jones industrial average surged more than 300 points. |
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