The Report into the Northen Rock bank failure "criticized Bank of England Governor Mervyn King for failing to act in August when the European Central Bank made extra funds available in an attempt to stop credit markets from freezing up. King had told the (UK parliamentary) committee last year that he had felt it would be wrong to intervene to bail out banks from their riskier investments, but the committee said it was unconvinced. In our view, the lack of confidence in the money markets was a practical problem and the Bank of England should have adopted a more proactive response." [CNN Money}. This failure was a stark example of how the BOE badly f**ked things up and it is why Bernanke and the Fed know that confidence in the total financial system is the overriding concern which informs and requires a quick process in bringing the interest rate down quickly in the context of the US economy and in dealing with all aspects and ramifications of the subprime mortgages meltdown.
I don't think they will cut 50, and I think the market is disappointed and sells off even more as a result.
What you are saying is ridiculous. The Fed shouldn't give a crap about where the stock market is and all they are doing is propping it up artificially (which never works in the long run). I would much rather have a recession than have hyperinflation. The US can come out of recession stronger. But hyperinflation will kill everything.
BUT, inflation is looking good right now, no? Core CPI not too bad. You have to strip out anything that actually inflates and all things necessary to life, like food, shetler, gas, etc because when the prices of those things go up, it's not real inflation. It's also a good idea to increase min wage this year, since we have no real inflation, we can afford to create some wage inflation. But hey, plasms TVs are going down every year and that's what's important.
150 bp worth of cuts over a 9-day period would be unprecedented and extremely foolish. in other words, they might just do it if bernie has a backbone, he'll leave rates unchanged and give the markets the finger. but he won't because he and the frb are spineless slaves to the equities markets.