The US Federal Reserve has cut interest rates by a further 0.75% from 3% to 2.25% as it aims to counter the credit crunch and its knock on effect to the markets. The move comes after the news that Bear Stearns was in trouble and a swift takeover deal was put in place with JP Morgan Chase as suitor. Some commentators are suggesting that the US is already in recession and the interest rate cut should have been 1% rather than the 0.75% delivered.

However the US Markets have reacted positively to the news and the Dow is currently up over 300 points. The anticipated cut also gave renewed cheer to the FTSE which ended the day up over 190 points and reversed much of yesterdays losses.

Undoubtedly there is still more troubled times ahead and the markets are currently places for the brave investor, but let’s enjoy the good news while we can.