The Fed Cuts Rates

The Federal Reserve cut the discount the rate by 50 basis points.
This isn’t the regular Fed funds rate we often talk about, instead it’s the rarely used discount rate. Still, this has a huge psychological impact. I think this means that the Fed will almost certainly cut the Fed funds rate at its next meeting on September 18.
The market is already up 200 points. Jim Cramer said this will be the biggest point move in history. For the record, the #1 day was 499.19 points on March 16, 2000.
This is interesting time for the Fed to step in because August options contracts expire today. Days like today are often more volatile than regular trading days. In short, the Fed isn’t afraid to take on the shorts.

Posted by Eddy Elfenbein on August 17th, 2007 at 9:59 am

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