Not the Deepest Rate Cut

The Fed's cut of three-quarters of a percentage point is less than investors were expecting, but markets rallied nonetheless
Traders work the floor of the New York Stock Exchange after the Fed announcement Mar. 18. Getty Images

After weeks of surprisingly aggressive moves to arrest the credit crunch, the Federal Reserve on Mar. 18 surprised the markets in the opposite direction—cutting interest rates a bit less than anticipated. It cut the federal funds rate by three-quarters of a percentage point, to 2.25%, rather than the 1% cut that most traders had been expecting.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.