Fed cuts interest rate .75 percentage point

The Federal Reserve has made an emergency interest rate cut of .75 percent, making the biggest single cut since October 1984 as fears of a recession loom. The Fed rarely cuts the key interest rate between scheduled meetings of the Federal Open Market Committee. The Fed said in a statement: “While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households.” The statement added that, “incoming information indicates a deepening of the housing contraction as well as some softening in labor markets.” Along with cutting the key overnight interest rate to 3.5 percent, the Fed also cut the discount rate 75 basis points to 4 percent.