Banks lowered the Prime Rate by 1/2 point this morning to 4.50%. 

This was in response to a  1/2 point reduction in the Fed Funds Target Rate by the Federal Reserve.  The Federal Reserve’s action was rare in two respects.  It acted in an emergency fashion and not as part of a regularly scheduled meeting.  It also acted in a coordinated effort with other central banks around the world who lowered their target lending rates.

The next Fed meeting is set for October 29, 2008.