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US Federal Reserve Cuts Discount Rate
The US Federal Reserve Thursday cut its discount rate to 5.5 percent from 5.75 percent, following a quarter-point cut in the same interest rate and a 0.5- percentage-point in the federal fund rate Wednesday in an effort to avert an economic recession.
"Completing action initiated yesterday, the board of governors today approved a discount rate of 5.5 percent, acting on requests submitted by the boards of directors of all 12 Reserve Banks," the Fed said in a brief statement.
The discount rate is the rate charged depository institutions when they borrow short-term adjustment credit from their district Federal Reserve Banks.
Wednesday's federal funds rate cut came four weeks ahead of Fed 's next scheduled meeting on January 30-31, a rare intermeeting move not taken since the fall of 1998 when a global financial turmoil threatened the U.S. economy.
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