Pabst, please correct me if i'm wrong (i know i can count on you for that at least ) but i thought that it was all the way into November of 2003 that Greenspan kept lowering rates even though by then the market was in an uptrend and it appeared that we were well on our why out of the recession. In fact, wasn't it at the Nov 2003 meeting that the Fed took the rates to a then historic low. If i'm right about this, then i have to question why the Fed kept easing for so long. If i recall, Greenspan expressed some concern about deflationary pressures at that time, but that does not really make a lot of sense either. I always assumed that he was just tooling up for the 2004 election and wanted to make sure that the economy was sufficiently goosed to give his ole buddy George a helping hand. It is also interesting to note that although Greenspan had the authority to clamp down on irresponsible mortgage lending, even after he was well aware of the ridiculous loans being made he still did not use the authority congress had given him. I guess he really believed that the mortgage market would self-correct. P.S. don't bother to point out how cynical i am. I already know it.
Cynicism is a winning trait among traders piezoe. Actually the last rate cut was in June of 2003-just three months after the market bottomed. Interestingly the unemployment rate reached it's highest level (6.3) of the recession that very month. So the economic data at the time wasn't too pretty. More importantly Bond futures traded their lowest yield in till then history that month too.