A similar step has not been taken in 16 years: The US Federal Reserve (FED) in one go lowered the key interest rate by 75 basic points from 4.25% to 3.5%. Another lowering by 25 basic points next week is expected by many analysts.
Due to this radical step some stock exchange experts speak of a panic reaction by the FED. Without no doubt within hours this step stopped the Wallstreet´s free fall and led to an increase of the German stock index DAX.
Officially, the FED justified this step by referring to less promising prospects for the economy and greater risks to economic growth. A continued negative development of the real estate and labour markets is also probably, according to the FED. Inflation risks, however, were not identified by the Fed.