The Fed Gets It Right

Over the many years I have worked on Wall Street I have often been critical of actions taken -or not taken – by the Federal Reserve.  However, currently I can only offer praise.  I believe that economic history will show that the actions taken by the Fed during the past two weeks likely saved the economy from utter chaos.  Using tools not used for a generation the Fed rescued a major investment bank.  If Bear Stearns had failed it would have been very scary in the financial markets.  Yesterday the Fed lowered interest rates less than expected.  While initially disappointed the market rallied to a huge gain as the possible rationale of the Feds move became apparent.  Things are bad but not that bad that a full point cut was needed.  This, and better expected earnings by Goldman Sachs sent stocks soaring.  Let’s hope it lasts a little longer.

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