The Federal Reserve cut interest rates by .75% in their regularly scheduled meeting on Tuesday, March 18, 2008. Stating that the economic outlook is not good, the Fed indicated that more rate cuts could be on the way.

The short-term rate is now down to 2.25%, down from 5.25% in September. The Dow went down at first, but then rose to an astonishing gain of 420 by the time the markets closed.

Many economists were predicting a full point cut and were surprised with the 3/4 cut.