Today's Fed Action

Today the Federal Reserve reacted to weakness in the economy and labor markets by cutting its main policy tool, the Federal Funds Rate from 100 basis points to a new target range between 0 and 25. This reflects the range where the effective Fed funds rate has been trading recently. I particularly liked this commentary from the WSJ's Real Time Economics blog:

Today’s FOMC statement will go down in the annals of Fed history along with Paul Volcker’s Saturday announcement going to reserve targeting in 1979. Volcker’s press conference was called the “Saturday Night Massacre.” I nominate this one to be called the “Who Could Ask for Anything More?” statement. The Fed is throwing everything in its arsenal at the economic/financial situation. –Stephen Stanley, RBS Greenwich Capital

Check out how other economists react at the RTE blog.