Skip to: Content
Skip to: Site Navigation
Skip to: Search
WEDNESDAY, NOVEMBER 25, 2009
| Subscribe to Newser's RSS feeds RSS | Follow Newser on Twitter Twitter


0

Fed Slashes Benchmark Rate

Larger-than-anticipated drop drives stocks up, dollar down

Share

(Newser) – The Federal Reserve aggressively cut its benchmark rate today, dropping the federal funds rate a half-point to 4.75%. The larger-than-expected cut was “intended to help forestall” the ballooning credit crisis, the central bank said in a statement. The cut in the key interest rate, the first in 4 years, was double the quarter-point drop that had been widely expected, Bloomberg reports.

The federal funds rate had stood at 5.25% since June 2006. The cut matched a simultaneous 50-basis-point drop in the discount rate, which now stands at 5.25% after an unanticipated half-point cut on August 17. Stocks rose on the news within minutes of the announcement, Reuters reports, while the battered dollar fell further.

Traders in the Eurodollar Options pit on the floor the Chicago Mercantile Exchange react to the Federal Reserve cutting its benchmark interest rate by a larger than expected half percentage point, Tuesday, Sept. 18, 2007 in Chicago. (AP Photo/M. Spencer Green)
Traders in the Eurodollar Options pit on the floor the Chicago Mercantile Exchange react to the Federal Reserve cutting its benchmark interest rate by a larger than expected half percentage point, Tuesday,...   (Associated Press)
Ben Bernanke, chairman of the U.S. Federal Reserve Bank, left, talks to Axel A. Weber, the President of the German Central Bank Bundesbank, during the annual Bundesbank Lecture on Tuesday, Sept. 11, 2007 in Berlin. (AP Photo/Miguel Villagran)
Ben Bernanke, chairman of the U.S. Federal Reserve Bank, left, talks to Axel A. Weber, the President of the German Central Bank Bundesbank, during the annual Bundesbank Lecture on Tuesday, Sept. 11, 2007...   (Associated Press)
Ben Bernanke, chairman of the U.S. Federal Reserve, addresses the audience during the annual Bundesbank Lecture in Berlin, Germany, Tuesday, Sept. 11, 2007. (AP Photo/Miguel Villagran)
Ben Bernanke, chairman of the U.S. Federal Reserve, addresses the audience during the annual Bundesbank Lecture in Berlin, Germany, Tuesday, Sept. 11, 2007. (AP Photo/Miguel Villagran)   (Associated Press)
German Chancellor Angela Merkel, left, welcomes Ben Bernanke, chairman of the U.S. Federal Reserve Bank, for a meeting at her office at the chancellery in Berlin, on Tuesday, Sept. 11, 2007. Seen in background is the German 'Reichstag' parliament building. (AP Photo/Bundesregierung, Guido Bergmann, Pool)
German Chancellor Angela Merkel, left, welcomes Ben Bernanke, chairman of the U.S. Federal Reserve Bank, for a meeting at her office at the chancellery in Berlin, on Tuesday, Sept. 11, 2007. Seen in background...   (Associated Press)
A television screen in a booth on the floor of the New York Stock Exchange shows the rate decision of the Federal reserve, Tuesday, Sept. 18, 2007. The Federal Reserve cut a key interest rate, Tuesday, for the first time in four years, starting with an aggressive half-point move to...
A television screen in a booth on the floor of the New York Stock Exchange shows the rate decision of the Federal reserve, Tuesday, Sept. 18, 2007. The Federal Reserve cut a key interest rate, Tuesday,...   (Associated Press)
« Prev« Prev | Next »Next » Slideshow
OFF THE GRID
11.24.09
Murdoch and Microsoft: The Mice Are Trying to Roar
11.23.09
Books Are Bad for You
0 comments
VIEWING:
 
LEAVE A
COMMENT Comment Policy
Facebook ConnectPost this comment to Facebook?

After connecting you will have the option to post your comment on your Facebook profile.

 

Related Newser Stories

185 Stories

 Fed Leaves Rate 
 at Record Low 

Says it wants to foster recovery

Nov 4, 09 1:43 PM CST
(AP) - The Federal Reserve today held a key interest rate at a record low and again pledged to keep it there for an "extended period" to foster the fragile economic recovery. The Fed says economic activity has "continued to pick up" and that the housing market also has grown... More »

MORE ABOUT:
Ben Bernanke • Federal Reserve • interest rate • Fed funds rate • interest rate cut

MARKETS

 Dow Off 77 on Consumer Data 


Aug 14, 09 3:19 PM CDT
(Newser) - Stocks dipped today on worse-than-expected information about consumer sentiment, the Wall Street Journal reports. A Reuters index dropped 3 points instead of the anticipated 2-point rise. A downward spiral has been evident since the Fed announced it would not raise interest rates Wednesday. “A day like today has... More »

MORE ABOUT:
stock market • NASDAQ • New York Stock Exchange • Federal Reserve • Dow Jones • consumer confidence • S&P 500 • interest rates

MARKETS

 Dow Off 23 on Fed Rate News 


Jun 24, 09 3:09 PM CDT
(Newser) - Markets were mixed today as positive economic indicators and surging tech stocks battled with a Fed announcement that interest rates would be held near zero, the Wall Street Journal reports. The Dow lost early momentum, but the Nasdaq flourished. “We’ve basically come through a panic phase,” an... More »

MORE ABOUT:
stock market • NASDAQ • New York Stock Exchange • Federal Reserve • Dow Jones • tech stocks • S&P 500 • interest rates

185 Stories


Wall Street likes what it hears
Reuters


US  •  Business 
TwitterFollow @NewserUS on Twitter

 
stock market • Federal Reserve • stocks • benchmarks • credit crisis • interest rate cut

from our news partners