The Federal Reserve board cut the target rate for banks’ short-term lending from 4.25 to 3.5 percent in response to the free fall that world financial markets have been experiencing. The emergency cut is meant to stimulate the economy and the announcement was made outside the normal meeting schedule. The Fed will still hold its planned meeting next week and there's speculation that they'll announce another cut [1] then. Here's what an economics reporter at the Wall Street Journal had to say: