US Federal Reserve cuts key interest rate by 3/4 point

Washington: The Federal Reserve on Tuesday cut a key interest rate by three-fourths of a percentage point, moving aggressively to contain a credit crisis threatening to push the US into a severe recession.

The Fed's action takes the bellwether federal funds rate to 2.25 per cent, the lowest since February 2005, and comes two days after the central bank announced the latest in a series of emergency measures to stem a fast-spreading global financial crisis.

Many in financial markets had expected the Fed to chop the overnight rate by a full point.

The Fed has now cut rates by 3 percentage points since mid-September, including 2 points since the start of the year.

In recent days, the central bank has also unveiled steps not used since the Great Depression to ensure financial institutions have access to liquid funds.