In an effort to further boost the ailing economy, for a second time in eight days the Federal Reserve cut its federal funds rate (the rate banks charge each other for overnight loans) by a half percentage point to 3% from 3.5% and also cut its discount rate from 4% to 3.5%. The discount rate is what the Fed charges member banks for short-term loans.

Commercial banks followed the Fed action by lowering their prime lending rate by the same half percentage point to 6%, the lowest in nearly three years. That prime rate applies to certain credit cards, home equity lines of credit and other loans.