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The Fed said it was cutting its key federal funds rate by 50 basis points to 1.5 percent. "Incoming economic data suggests that the pace of economic activity has slowed markedly in recent months," the Fed said in a statement. "Moreover, the intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit." The Wednesday cuts come as markets in Asia and Europe sink amid waning confidence, "Throughout the current financial crisis, central banks have engaged in continuous close consultation and have cooperated in unprecedented joint actions such as the provision of liquidity to reduce strains in financial markets," the banks said at a joint statement.  ECB'S STATEMENT Noting that "inflationary pressures have started to moderate in a number of countries, partly reflecting a marked decline in energy and other commodity prices," the ECB said it had also reduced its other two key rates by the same amount. The ECB’s marginal lending rate was cut to 4.75 percent and the interest rate on the ECB’s deposit facility fell to 2.75 percent. French President Nicolas Sarkozy on Wednesday called for coordinated action between governments and central banks as the only way to confront an "unprecedented financial storm." OTHER BANKS The Chinese Central Bank's announcement Wednesday said the government is increasing the pool of money available for lending by reducing the amount banks must hold in reserve.    BOJ NOT TO PARTICIPATE The Bank of Japan said Wednesday it supported coordinated rate cuts by the world’s central banks but was not participating as its benchmark rate is already low. The Japanese central bank said it "expresses its strong support" for the rate cuts by counterparts in the But it said that in  MARKETS UP  Although the move came after the close of another calamitous day of losses in the  "We are not out of the woods yet," City Index market strategist Joshua Raymond told to AFP. "We will have to see whether this has any long lasting effect on confidence."  The London Stock Exchange had earlier plunged 7 percent after the government announced a 50-billion-pound part-nationalization of the country's main banks as part of an emergency bailout package worth a total of 500 billion pounds.  Following the rate reductions,  Wall Street has turned around sharply with stock index futures shooting higher in response to an emergency half-point interest rate cut by the Federal Reserve. Dow Jones industrials futures surged 168, or 1.78 percent, to 9,706.00 after being down 140. Standard & Poor’s 500 index futures rose 29.20, or 2.82 percent, to 1,035.00. Â
The ECB also cut by a half-point to 3.75 percent as did the Bank of England, taking its rate to 4.5 percent.
Bank of
Global stock markets surged back into positive territory on Wednesday after major central banks slashed interest rates to tackle a worsening financial crisis.