The US Fed cut interest rates by half a percentage point to 1 per cent yesterday and announced that it would lend $30bn each to central banks in Brazil, Mexico, South Korea and Singapore to lend on to local banks. The dollar loans, structured as currency swaps, are intended to help meet intense demand for dollars in these major emerging markets. The Fed’s cut takes US rates down to a level only once equalled before, amid the deflation scare of 2003 to 2004.