FED helps market go up

Task: The DOW went up over 400 points on Tuesday. Why? What did The Federal Reserve do to encourage the market to go up?


The DOW went up over 400 points on Tuesday because the Federal Reserve degraded short-term interest rate for the sixth time in the past six months on Tuesday as its continuous attempt to strengthen the economy. The central bank lowered its federal funds rate the rate it charges banks for overnight loans by three-quarters of a percentage point, to 2.25 percent, and left the door open to additional rate cuts in the months ahead though it was one of the biggest one-day rate cuts in decades, investors had been betting heavily that the Fed would cut its key rate a full percentage point in response to strong evidence that a recession has begun and to the deepening crisis on Wall Street. In order to ease tension amongst a close, not a recession in the stock market investors were expecting a full percentage point in regards to the possible recession and financial crisis that the country is facing right now that is why the Federal Reserve plans to give $200 billion dollars to the market.