The US Federal Reserve cuts interest rates by 0.75% to 3.5%
23 January 2008
The US Federal Reserve cut interest rates overnight by three-quarters of a percentage point, the biggest interest rate cut in more than 23 years. The move also consitutes the first emergency action since 2001, when the Fed intervened after the September 11 terror attacks.
The action by the rate-setting Federal Open Market Committee took the key federal funds rate down to 3.5%, its lowest level since September 2005. The Fed also lowered the discount rate, which it charges on direct loans to banks to 4%.
Treasury Secretary Henry Paulson said he was confident the US and global economies were resilient but welcomed an emergency rate cut by the Federal Reserve as a helpful move.