[1520] Of Bernanke is serious

75 basis points cut.

WASHINGTON (AP) — The Federal Reserve, confronted with a global stock sell-off fanned by increased fears of a recession, cut a key interest rate by three-quarters of a percentage point on Tuesday.

The Fed said it was cutting the federal funds rate, the interest that banks charge each other on overnight loans, to 3.5 percent, down by three-fourths of a percentage point from 4.25 percent.

The Fed action was the most dramatic signal it can send that it is concerned about a potential recession in the United States. It marked the biggest one-day move by the central bank in recent memory. [Fed Cuts Interest Rate. AP via Google News. January 22 2008]

Definitely a more effective move than a one-time tax cut.

And thinking back, I remember somebody asked for a 175 basis points cut back in September 2007. Well, he just got it in about 4 months.

Finally, I think, the Fed is the world central bank.