Fed Slashes Key Rate

Updated from 8:51 a.m. EST

With financial markets around the world gripped by fear of an economic slowdown, the Federal Reserve took an extraordinary measure on Tuesday morning by slashing its key interest rate target by 75 basis points in an effort to calm investors and stabilize the markets.

The Fed had next been scheduled to convene at a two-day meeting beginning Jan. 29, but huge selloffs in overseas markets on Monday, while U.S. markets were closed, and an anticipated sharp decline in U.S. stocks at Tuesday's opening bell brought the central bank off the sidelines.

In a statement, the Fed hinted that it was prepared to ease further at its meeting next week, saying it "will continue to assess the effects of financial and other developments on economic prospects and will act in a timely manner as needed to address those risks." ...