Below economists analyse the impact of the Fed’s move to cut rates in notes sent out shortly after the decision. Read the reaction of FT.com readers to the rate cut, and vote in our poll, here

“The Fed’s decision to reduce interest rates, after holding them steady for 9 consecutive meetings, was widely anticipated by the markets. There was some debate in advance of the meeting as to the magnitude of the reduction, but the Fed ultimately delivered what market expectations had gravitated to for several days – a 50-basis-point reduction in the federal funds rate. In addition, the FOMC reduced the discount rate by 50 basis points, thereby retaining the unusually narrow spread of 50 basis points between the federal funds rate and the discount rate.