INSTANT VIEW: Fed cuts benchmark rate by 3/4 point

NEW YORK (Reuters) - The Federal Reserve slashed a key U.S. interest rate by three-quarters of a percentage point on Tuesday, a substantial cut but smaller than many in financial markets had expected, as part of an effort to hold off a deep recession and financial meltdown.

KEY POINTS: * The Fed's action takes the bellwether federal funds rate to 2.25 percent, the lowest since February 2005. * Many in financial markets had expected the Fed to chop the overnight rate by a full point. * Fisher and Plosser preferred less aggressive action, the Fed said

COMMENTS:

BRET BARKER, PORTFOLIO MANAGER, METROPOLITAN WEST ASSET

MANAGEMENT, LOS ANGELES:

"The Fed decision was a non-event between 75 basis points and 100 basis points when the Fed is moving in such large chunks or increments. The muted rate reaction leads you to believe that the market was positioned for 75, and not 100, despite what fed-funds futures showed. The big move by the Fed is that policy makers already did some heavy-lifting over the weekend by cutting the discount rate by 25 basis points and adding the new lending facility."

DAVID JOY, MARKET STRATEGIST, RIVERSOURCE INVESTMENTS,

MINNEAPOLIS:

"The mention of inflation seemed to be a little bit more heightened than in the past. The language still referred most heavily to the downside risk to growth. I don't think it's any change. But they did give a nod of acknowledgment to those who are concerned about inflation, including ourselves. But I think they left the door open for further rate cuts..."