Fed cuts interest rate to 4.75%
The US central bank, the Federal Reserve, has made a dramatic intervention in financial markets by cutting rates to 4.75% from 5.25%.
The move, the first US rate cut in four years, is aimed at restoring confidence in the housing market and preventing the turmoil from denting the economy.
Other central banks, including the Bank of England, are expected to follow suit to calm the growing financial panic. World stock markets soared on the news, with US shares up sharply.
The Fed move could help prevent the US economy, which is already slowing down, from sliding into a recession, which could hurt economic growth prospects around the world.
Comment