INSTANT VIEW: Fed leads global coordinated rate cut

NEW YORK (Reuters) - The Federal Reserve led a coordinated round of global official rate cuts on Wednesday, easing by a half-point, as did the European Central Bank, Bank of England and Swiss, Canadian and Swedish banks.

In an attempt to stem unprecedented global market turmoil, the Fed cut its key federal funds lending rate by half a percentage point to 1.5 percent and also lowered its discount rate by the same amount to 1.75 percent.

The ECB also cut by a half-point to 3.75 percent as did the Bank of England, taking its rate to 4.5 percent.

KEY POINTS: * US Federal Reserve says cutting Fed funds rate 1/2 percentage point to 1.5 percent * Fed says acting in coordination with ECB and Central Banks in Canada, UK, Sweden, Switzerland * Fed says acting because of growing evidence of weaker economic activity, reduced inflation pressure * Fed says intensifying financial market turmoil likely to further restrain spending * Fed says also cutting discount rate by 1/2 point to 1.75 percent

COMMENTS:

CHARLES DIEBEL, HEAD OF INTEREST RATES STRATEGY AT NOMURA, LONDON:

"The central banks of the world have finally woke up to the gravity of the current situation with coordinated rate cuts across the globe. The Fed, ECB, MPC, SNB, Riksbank, BoC. Even China joined the party with a 27bp rate cut.

"The market reactions have been predictable with the long end of every major curve coming off. This is a major step to convincing the world that they are serious about stabilizing the current crisis.

PAUL DALES, UK ECONOMIST, CAPITAL ECONOMICS

"It's pretty much what has been expected, but just ahead of schedule. This is the start of a trend that's going to take interest rates to take interest rates down to a low level of perhaps 2.5 percent, and it's encouraging that the Bank, along with all the other central banks is staring to realize the need for lower rates across the board."

TOM HOUGAARD, CHIEF MARKET STRATEGIST AT CITY INDEX, LONDON

"The market likes it. We were looking for something like this to happen. It's good to see the FTSE 100 being up on the day. Let just see where we are going to close today. That's the most important. If we can get a good close today, I will be more optimistic."

"It won't do the trick ... We are in a structural bear market. We will have some relief now. That's what important."

PETER DIXON, ECONOMIST, COMMERZBANK, LONDON

"The fact that we have got them coming across the board suggests that this is the end game. Everything that we have heard from central banks in the past two-three weeks has got out of the window. This is a coordinated monetary action to prevent a bigger meltdown.

"Will it help? Only time will tell. Will it help the markets? Questionable in the short term. Will it help the economy? No because basically we have got to work through the next weeks, months and years to find out exactly what the implications of recent events are going to have."