The Federal Reserve's policymaking committee cut the federal funds rate today by half a percentage point to 4.75 percent--the first rate cut since 2003. The stock market rose sharply just minutes after the announcement. The lower federal funds rate--the rate that banks charge each other to borrow money--will make it cheaper for consumers and businesses to borrow, which could bring about lower interest rates on business loans, mortgages and credit card debt. "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 a statement.