Fed Aggressively Cuts Funds Rate by Three-Fourths of a Percentage Point

AP
Fed Cuts Funds Rate to 3-Year Low
Tuesday March 18, 2:23 pm ET
By Martin Crutsinger, AP Economics Writer
Fed Aggressively Cuts Funds Rate by Three-Fourths of a Percentage Point

WASHINGTON (AP) — The Federal Reserve on Tuesday slashed a key interest rate by three-fourths of a percentage point, moving aggressively to contain a credit crisis threatening to push the country into a severe recession.
The latest action brought the federal funds rate — the interest that banks charge each other — down to 2.25 percent, the lowest point since late 2004. It marked the second back-to-back cuts of three-fourths of a percentage point.

Fed Chairman Ben Bernanke and his colleages have now cut the funds rate six times since last September, with the reductions becoming more aggressive since January as the central bank has faced growing turmoil in global financial markets.

In Jacksonville, Fla., Tuesday, President Bush said the government will take further action — if necessary — to help the sagging economy.