Federal Funds Rate Cut to 1.5%

The Federal Reserve, working in coordination with other central banks worldwide, enacted an emergency interest rate cut on Wednesday.

The Fed lowered its fed funds rate by half of a percentage point to 1.5%. This rate is the central bank's key tool to affect the economy. Lowering the rate pumps money into the economy by reducing the borrowing cost on a broad range of loans, including credit cards, home equity lines and many business loans.

"The recent intensification of the financial crisis has augmented the downside risks to growth and thus has diminished further the upside risks to price stability," the Fed said in a statement.

read the CNN story