As markets worldwide continue to plummet, the Federal Reserve, along with six other major central banks from around the world slashed interest rates simultaneously Wednesday.
The Federal Reserve reduced its key funds target interest rate from 2% to 1.5%. In Europe, the Bank of England cut its rate from 5% to 4.5 percent and the European Central Bank sliced its rate from 4.25% to 3.75 percent.
Also cutting rates were the central banks of China, Canada, Sweden, and Switzerland. All the cuts occurred with seconds of each other.
Japan made no move, despite the fact that the Nikkei 225 Index plunged 9.4%, its worst single-day loss in two decades.
Ian Shepherdson, chief United States economist at High Frequency Economics said:
"At last, a coordinated show of force. The move is to be applauded but there is more to come. The playbook to avoid depressions says rates need to be as close to zero as possible."
Marc Chandler, global head of currency strategy at the investment firm Brown Brothers Harriman said:
"At first blush, while this is an big step, it is unlikely to prove sufficient to stem the rot. Additional rate cuts are likely and further measures to inject liquidity and re-capitalize banks are needed."
Besides the Nikkei drop, in earlier trading Wednesday, European stocks fell about 5%, and trading was suspended on both Russian stock markets - one until Friday and the other until further notice.
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