Hi Desert Real Estate Forum

The half-point reduction was double the quarter-point move that many had expected and sparked euphoria among investors, who had been worried that the central bank would be too slow in responding to recent market turmoil.

The Dow Jones industrial average, which was up by 84 points right before the Fed decision, soared by more than 250 points following the mid-afternoon announcement.

The Fed's action is designed to boost economic growth by lowering borrowing costs for millions of consumers and businesses. Commercial banks followed quickly with announcements that they were slashing their prime lending rate by a half-point to 7.75 percent. It had been at 8.25 percent for the past 15 months.