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Moved PermanentlyMoved PermanentlyFortune Investor DataHistorically, if the Fed really tries to avert an extended recession, it almost always succeeds. And Greenspan has not only cut rates more in January than he's ever done in any one month, he's hinted that more cuts are on the way. The fact that he's obviously on top of the situation may be giving businesses and consumers alike a sense of long-term optimism that can be self-fulfilling...
...trillion, 10-year tax-cut plan is an opportunity. Not to fight a possible recession that could be over by summer - that's the Fed's job - but to reset the federal government's expectations of how much its constituents should be forking over every April. And to cut some of the fat out of the two flabbiest documents in the free world: the tax code and the federal budget...
...Which is not to suggest the Fed sat on its hands Wednesday. The half-point cut, thoroughly expected by the markets, did spark a "buy-the-rumor-sell-the-news" mini-slump, but clearly this was not the abject disappointment that a quarter-point drop in the bucket would have been, and the next month should be relatively happy one on the Street. After taking back that roundly criticized (mostly in hindsight) May half-point hike in January, Greenspan has now done it again, lopping off another half-point, and stands ready to pull a February surprise just like January...
...keeping with his very sound pledge Tuesday - "I had commented out loud about one of the actions he took; that's the last time I'm going to comment" - Bush ignored today's Fed move and kept on plowing though the introductions at his first Cabinet meeting. But he sure did talk about tax cuts...
...slowdown is still very much on, and the Fed is still very worried about a recession. But new home sales are rising, mortgage rates are falling, and record rates of mortgage refinancing promise to keep pockets filled. Even as consumer confidence plummets, consumer spending has been holding steady, and there apparently wasn't much perceived downside to moving just a little slower than the lead bears this time around...