Interest rates trimmed

The Bank of Canada and its U.S. counterpart came to the defence ofstaggering equity markets and weakening economic prospects by loweringinterest rates yesterday, a move designed to spur borrowing andspending.

The Bank of Canada and its U.S. counterpart came to the defence of staggering equity markets and weakening economic prospects by lowering interest rates yesterday, a move designed to spur borrowing and spending.
In separate moves, the Canadian bank trimmed its key rate by one-quarter percentage point, while the U.S. Federal Reserve, acting a week before its scheduled date, axed its rate by three-quarters of a point.
The actions left the key policy interest rates for the two countries at four per cent in Canada and 3.5 per cent in the U.S.
The Fed's unscheduled intervention seemed to have an immediate impact on equity markets. Toronto’s S&P/TSX index surged 508.75 points to 12,640.88, offsetting most of Monday's 605-point loss. The Dow Jones closed down just 128.11 points after being down as much as 457 points early in the session.


 
 
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