US Federal Reserve lowers interest rate to 5%
The US Federal Reserve took an aggressive move against a recession this evening by lowering its overnight interest rate by a half a percent to 5%.
The cut falls short of the 75-basis-point cut demanded by the financial markets, although it is bigger than its usual quarter-point moves.
The Fed said profit margin pressures were restraining investment spending while the falling stock market had hurt consumption.
The Federal Reserve cut rates by 100 basis points on two separate occasions in January.
As a result of the announcement, the Dow Jones industrial average and Nasdaq composite index fell immediately, after being up modestly beforehand.
