Fed cuts discount rate, announces new steps

WASHINGTON (Reuters) - The U.S. Federal Reserve on Sunday lowered the discount rate it charges on direct loans to banks and announced a new facility through it which will lend to other big financial firms.

In a surprise statement, the central bank said it cut the discount rate to 3.25 percent, effective immediately. It also said it was setting up a new lending program under which so-called primary dealers could borrow directly from the Fed at that same rate.

(Reporting by Mark Felsenthal)