The Federal Open Market Committee today lowered its target for the federal funds rate 75 basis points to 3.5 percent -- the steepest cut since 1984 -- in an attempt to prevent a market meltdown and recession. The Fed took this action between its regularly scheduled monetary policy meetings. It's the first time it has cut rates between such meetings since just after the Sept. 11, 2001, terrorist attacks. The federal funds rate is the rate banks charge each other for overnight loans, and it impacts how much consumers pay on credit card debt, auto loans and home equity lines of credit. According to the Fed's 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 bu...
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