WASHINGTON (AFP) - Investors are fixating on the Federal Reserve after its discount rate cut Friday, hoping the US central bank will take stronger action to ease the credit crunch roiling markets worldwide.
The Fed took markets by surprise Friday by slashing its discount rate, the interest rate charged on loans to commercial banks, by a half-percentage point to 5.75 percent.
Equity markets cheered the decision, announced before Wall Street opened: the Dow Jones industrial jumped 1.82 percent, the first time it closed higher in seven sessions. The news lifted the major European stock markets out of earlier losses.
Yet the central bank did not touch its key federal funds rate -- the overnight rate banks charge each other -- despite investor cries for relief.
Man, those Wall Street boys sure are a bunch of spoiled rich kids. The Fed steps in Friday and before the weekend is over they're bleating like stuck sheep.