WASHINGTON (AP) – The Federal Reserve unexpectedly slashed a key interest rate by a bold three-fourths of a percentage point on Tuesday, responding to a global plunge in stock markets that heightened concerns about a recession. The Fed signaled that further rate cuts were likely.

The reduction in the federal funds rate from 4.25 percent down to 3.5 percent marked the biggest reduction in this target rate for overnight loans on records going back to 1990. It marked the first time that the Fed has changed the funds rate between meetings since 2001, when the central bank was battling the combined impacts of a recession and the terrorist attacks.

Fed Cuts Interest Rates by 75 Bps By MARTIN CRUTSINGER,AP Posted: 2008-01-22 18:31:35

PRECIOUS METALS: NY Gold Climbs On Volatile Day After Fed Cut By Allen Sykora Of DOW JONES NEWSWIRES

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