The Federal Reserve and five other central banks cut interest rates by 50 basis points in an emergency attempt to stem the economic effects of the credit crisis, reports Bloomberg. The move brings the American benchmark rate to just 1.5%, while the European Central Bank and the monetary authorities of the UK, Canada, Switzerland, and Sweden all joined in the action. China also cut rates by more than a quarter-point.
The Fed, whose board voted unanimously for the cut, said in a statement that "the intensification of financial market turmoil is likely to exert additional restraint on spending." While markets in Asia and Europe dove today, the coordinated action may help to reverse the falls. European markets pulled back after the announcement, and futures indexes in New York shot higher after a sharp downturn.