Fed lowers rate half point giving strong sign to curb crisis

Ben Bernanke

US Federal Reserve has decided to lower its target for the federal funds rate 50 basis points to 4-3/4 percent. This measure causes great surprise, since most analysts expected a 0.25-per cent trim to 5 per cent. This also shows that the Fed admits how serious current crisis is. The last time US monetary authority cut rates was in June 2003, when it made the last reduction out of 13, which extended for two years and a half, taking credit cost to 1 per cent, equal to 1958 minimum.