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Breaking News: Fed Cuts Interest Rate
Published Oct 31, 2007
It has just been reported that in a bold strike, the Federal Reserve slashed a key interest rate by a half point on Tuesday -- the first cut in over four years -- and left the door open to further relief to prevent a painful housing slump and jarring credit crunch from driving the country into recession.
Wall Street responded enthusiastically, propelling stocks up 335.97 points -- its biggest one-day point jump in nearly five years. Politicians, shaken by record-high home foreclosures, also welcomed the move.
In a crucial and anxiously awaited decision, Federal Reserve Chairman Ben Bernanke and his central bank colleagues lowered an important interest rate to 4.75 percent. Economic and political pressure has been building on the Fed to act.
As a result, Wells Fargo, Bank of America and other commercial banks dropped their prime lending rate charged to millions of borrowers by a corresponding amount to 7.75 percent.
Whether Bernanke can handle the crisis successfully is the biggest challenge he has faced in his 19 months at the Fed helm.
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