The Federal Reserve has cut its target for the federal funds rate, which banks charge one another on overnight loans, to a range of 0 to 0.25 percent, the lowest level since records began in 1954, the Associated Press reported. That would be down from the current 1 percent rate, which has only been seen once in the last half-century.

Economists had predicted the rate would be cut to 0.50 percent.

Now that the more traditional methods of fighting a recession are being exhausted, Federal Reserve Chairman Ben Bernanke and his colleagues also vowed to explore other tools to revive the economy. These methods could be revealed as the Federal Reserve wraps up a two-day meeting.

Cutting the fed funds rate will lower the prime lending rate for many consumer and small-business loans by the same amount. That rate is currently 4 percent.

The move sent the Dow Jones industrial average up 237.19 points to 8,801.72 as of 1:35 p.m.