** FILE ** In this April 3, 2008 file photo, Federal Reserve Chairman Ben Bernanke testifies on Capitol Hill in Washington. With inflation moving higher on its worry list, the Federal Reserve held interest rates steady Wednesday, June 25, 2008, ending nearly a year of cuts to bolster the economy, and hinted that the next direction for rates could be up. (AP Photos/Susan Walsh, File)
Washington (AP) The Federal Reserve has ordered an emergency interest rate cut of half a percentage point, knocking the key rate to 1.5 percent.
The fed was joined in a coordinated action by the European central bank, the bank of England, and the banks of Canada, Sweden, and Switzerland. China cut its rate as well but it's not clear if that's also part of the coordinated effort.
The Fed earlier signaled that it might cut interest rates after a series of other bold steps failed to stem the financial meltdown.
Fed Chairman Ben Bernanke defends the most aggressive federal intervention in the financial system since the 1930s. And he says regulators are looking for other innovative ways to try to stabilize markets.