The U.S. Federal Reserve this evening cut its key short-term interest rate by a half percentage point and said it was prepared to cut them further if needed to prevent the economy from slowing too much.
The move, which came four weeks ahead of the year's first scheduled meeting of the Federal Open Market Committee, takes the fed funds overnight bank lending rate to 6%.
To underline its surprise move, the Fed also said it had cut the more symbolic discount rate on Fed loans to commercial banks by a quarter percentage point to 5.75%.
It was the first time the Fed cut interest rates between regular meetings since the fall of 1998, when a global economic crisis threatened to seize up world financial markets.
