The federal reserve has cut interest rates for the first time since the financial crisis

The federal reserve suddenly cut interest rates by half a percentage point on March 3rd to cushion the blow.

The fed had been expected to cut rates after its meeting on January 17 and 18, but the decision came two weeks early.

The last time the fed had an “emergency rate cut” was after the collapse of investment bank lehman brothers in 2008.

Many economies around the world are cutting interest rates to cope with the effects of the new outbreak. The fed’s rate cut follows rate cuts by the reserve bank of Australia and Malaysia, with Hong Kong following in the footsteps of the us.

The fed’s interest rate cut was meant to pump more money into the market and stimulate the economy. But it has had the opposite effect on American stockmarkets.

Last week, U.S. stocks suffered their worst week since 2008 and rallied on Monday amid signs the federal reserve will cut interest rates after its march meeting to boost the economy.

On Tuesday, the first trading day after the rate cut, U.S. stocks rose in the first half hour of trading on news of the federal reserve’s emergency rate cut, but fell sharply within a few minutes, with the standard & poor’s falling as much as 3.6% before closing down 2.8%.

The fed cut the federal funds rate by 0.5% to between 1% and 1.25%.

In short, the interest rate is the rate at which American Banks borrow money from each other.

If that rate goes up, so does the rate at which Banks lend to businesses or individuals. On the other hand, when interest rates are cut, the rate at which Banks lend will fall, which will spur businesses and individuals to take out loans, making it easier to borrow money and generally having the effect of stimulating the overall economy to become more active.

The fed adjusts this interest rate to achieve one goal – to maintain maximum employment and price stability in the United States. Lower interest rates when the economy is weak, pumping more liquidity into the market and stimulating the economy. Raise interest rates when the economy is strong, reduce the money supply and prevent overheating.