Fed cuts US interest rates in surprise move
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bear stearns, feds, rate cuts March 17th, 2008THE US Federal Reserve in a surprise move has today lowered the discount rate it charges on direct loans to finance companies by 25 basis points to 3.25 per cent.
The Fed board unanimously approved today a request by the Federal Reserve Bank of New York to decrease the so-called discount credit rate from 3.5 per cent, effective immediately.
The Fed also announced a new facility through it which will lend to other big financial companies to try offset the effects of the US sub-prime mortgage crisis, which has seen credit costs spiral.
This lending facility will be available for business on Monday, March 17. It will be in place for at least six months and may be extended as conditions warrant, the US Federal Reserve said today.
The US Federal Reserve also said today it would provide special financing to JPMorgan Chase to facilitate the deal.
The central bank has agreed to fund up to $US30 billion ($32.02 billion) of Bear Stearns’ less liquid assets.
Tags: bear stearns, feds, rate cuts
