Fed Makes Emergency Rate Cut of 75 Basis Points

WHOA-AGE. The Fed didn't make a move at its last meeting and could have made a move at the next scheduled meeting in eight days but instead cut the overnight lending rate by 75 basis points today, to 3.50%. This is the largest cut since 1982. The Fed has not made a rate cut outside its formal meetings since Septermber 17, 2001. They also lowered its discount rate by 75 basis points, to 4.00%. The next meeting is January 29 and 20, where the market predicts another 50 basis point cut.

Rate cuts are supposed to stimulate economic growth by making money cheaper to borrow...for both consumers and investors.