In order to sooth the repercussions of the US mortgage crisis on the US economy the Federal Reserve lowered the most important key interest rate by 0.5% to 4.75%. Another key interest rate was lowered by 0.5% to 5.25%. Back in August, this latter key interest rate had already been lowered by half a percentage point.
The US key interest rate had been unchanged for four years. The extent of yesterday´s adjustment took experts by surprise. However, this step by the Federal Reserve Bank showed its determination to protect the US economy from a major turndown, say most economic experts.
Immediately after the Fed´s move had been announced, US share prices rose at the stock exchanges. On the other hand, the dollar lost value against the Euro which hit a new record high. 