US govt cuts interest rate amid global stock sell-off

The Federal Reserve has cut a key interest rate amid a global stock sell-off.

The Fed is cutting the federal funds rate to 3 and a-half percent, from 4 and a-quarter. The rate is what banks charge each other on overnight loans.

The action is the most dramatic signal the Fed can send that it's concerned about a potential recession in the United States. It's the biggest one-day move by the central bank in recent memory.

The Fed says it decided to cut the rate "in view of a weakening of the economic outlook and increasing downside risks to growth."

The decision was made during an emergency telephone conference with Fed officials last night, after global financial markets plunged on concerns about a U.S. recession.

Before the Fed move, the Dow Jones industrial futures were down more than 500 points, or more than 5 percent. After the announcement, the Dow futures bounced back somewhat, down about 200 points, still pointing to a sharply lower open on Wall Street.