The feds have stated on numerous occasions that they will act timely as needed to spare the economy from the spillover from the housing slump. At the time the Board of Governors announced as well lowering the Discount Rate with another 75 basis points now at 4.0% approving the request by the Board of Directors of the Federal Reserve Banks of Chicago and Minneapolis.

The statement stressed weaker economic outlook which called for such fed intervention, though their regular policy meeting is scheduled for next week, reflecting the necessity of such a move after the equity rout seen on back of US recession and expectations of global slowdown.

The Committee took this action in view of a weakening of the economic outlook and increasing downside risks to growth. While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households. Moreover, incoming information indicates a deepening of the housing contraction as well as some softening in labor markets.

The Federal Committee has put aside inflation expectations and has taken the high road as the economy heads in the red. Expecting inflation to moderate as at the current rate sluggish growth will surely pull headline inflation down to the comfortable zone as they salvage growth.

Unemployment in the United States crept back to a two-year high as they see the everlasting straw that supports the economy fiddle under pressure. Resilient expenditure as seen in the third quarter will no longer support the contracting economy; seemingly 4th quarter growth readings are now in their hands and obviously will be as bad as previously anticipated and they are to under meet preset projections.

The sole vote opposing the emergency cut was William Poole who did not see current conditions justify action before next week's scheduled meeting, while Frederic S. Mishkin was absent.

The Fed surely acted preemptively to salvage growth as the Bush government is proposing to induce an estimated $150 billion fiscal stimulus to help mitigate economic headings into recession and revive consumer spending.

The global equity sell-off sure convinced the Fed to take action fearing that once again the rout seen in August will emerge once again, as American markets were out yesterday and the action was rather timely today before the damage in magnified. As well they have learned from the doomed history as not to see another Black Monday in the markets once again.

Indices yesterday performed their worst since post September 11th attacks as Asian shares plunged and European Markets followed their lead. Fear has already spread to the world, and seems that the US has to take strict policy actions and more easing is to be seen to rest the economy ashore and restore scattered confidence in the Global Economy.

The American housing market did not bottom up till now reaching almost to the slowest in two decades and signs of stability are still not close to be seen, as the feds easing policy hopes to restore some sense to the stricken sector as Banks world wide are still reporting massive writedowns and losses correlated to subprime holdings as almost all have failed to meet targets and market expectations.

The FOMC action has still to sink further into markets as an appropriate reaction is to be justified; this can be read be interpreted in many ways and time will show us what the market took out of this, they either will see the US heading into a recession and nothing now will save the economy, thereby fears of Global recession and massive slowdown will be the ripple effect, and the market will stay jittery as is; or the second will be a more optimistic view as the US officials are utilizing all means possible to salvage the economy and the world economies will suffer no more that a mild effect and downturn not worse form ongoing US dilemma.

If matters come to me I can say one thing, the Feds and the US government will work hand in hand to restore the economy back on to the right track not to salvage the economy yet to revive it once again; I say the United States is ALREADY in recession and all effort is to spare the GLOBE not just the US as what we say is barely the tip of the iceberg.

Affected by the release the euro took trading against the dollar higher hit the high at 1.4590 and now trading around 1.4540s; yet we see sterling still weak as the currency is getting losing ground against the euro and now around $1.9480s. As for the Japanese yen it hit the high at 106.89 and is trading lower yet still heading to the upside. The Dow Jones gained almost 400 points, Nasdaq inclined almost 70 points, while S&P 500 added 50 points yet all US indices fell back again shedding some of their gains as fear are still the cut will not curb headings into recession in the world's largest economy.

The idea of recession and its reversal is going to take much more than decisions to fade away it will take figures to prove so or even other wise. Till more readings come from the hammered economy not much will convince markets otherwise…