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The Federal Reserve led a global round of emergency interest rate cuts Wednesday in an effort to contain the worst financial crisis since the 1930s.

The Fed said it was cutting its key federal funds rate by 50 basis points to 1.5 percent. China, the European Central Bank (ECB) and central banks in Britain, Canada, Sweden and Switzerland also cut rates in the coordinated response which analysts had been demanding.

“Incoming economic data suggests that the pace of economic activity has slowed markedly in recent months,” the Fed said in a statement.

“Moreover, the intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit (pay day loans).”

World stock markets cut heavy losses after the move.

The dollar fell further versus major currencies and U.S. Treasuries rose. German government bond futures wiped out gains, while European bank shares turned positive.

“At last they all woke up!” Bank of America rates strategist Riccardo Barbieri-Hermitte said.

Britain had earlier offered to pump at least 50 billion pounds ($87.2 billion) into its biggest retail banks to help them survive the crisis. 

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