The Federal Reserve cut a key interest rate today, aiming to prevent turbulence in the housing and credit markets from slowing the U.S. economy.

The Fed’s policymaking committee slashed the federal funds rate, the rate that banks charge each other to borrow money, by half a percentage point to 4.75 percent. It was the first rate cut since 2003.

“The tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally,” said the Federal Open Market Committee in its statement announcing the move. “Today’s action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time.”

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