For the first time in the Federal Reserve chief’s tenure, the central bank Tuesday slashed the federal funds rate by half a percentage point, to 4.75 percent, and left the door open to further relief to prevent a painful housing slump and jarring credit crunch from driving the country into recession. As a result, several major commercial banks dropped their prime lending rate.

FRED REID

Burlingame-based Virgin America Inc., the airline partly owned by U.K. billionaire Richard Branson, won U.S. permission to keep Reid, its CEO, until Feb. 18 so the company has time to find a replacement. The ruling is a victory for Virgin America, which had agreed to replace Reid after the Transportation Department said it was worried he would be beholden to Branson.