Global stock markets surged after the Federal Reserve moved aggressively to head off the risk of a sharp slowdown in the US economy on Tuesday, cutting interest rates by 50 basis points to 4.75 per cent.

VIDEO

Jamie Chisholm, deputy markets editor, and Javier Blas, commodities correspondent, on market reactions to the half point cut in US interest rates

The Fed said the rate cut was intended to “help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets”. It also cut the discount rate at which it lends directly to banks by 50bp.