U.S. Rate Cut Could Reach 75 Basis Points

With the global financial market going into a panic, the U.S. Federal Reserve Board is expected to slash the federal fund rate.

The Federal Reserve is also considering a set of effective measures that include purchasing commercial papers issued by corporations to raise funds and providing unsecured loans to banks.

Fed Chairman Ben Bernanke and U.S. Treasury Secretary Henry Paulson held talks Monday on emergency measures to stabilize the short-term money market.

U.S. media said the Fed is highly likely to lower the federal fund rate of two percent by up to 75 basis points to stabilize the financial market. The move is expected before the meeting of the Federal Open Market Committee October 28 and 29.

higgledy@donga.com