The Fed Respones (Finally)

The Fed came to the rescue today cutting theDiscount Rate 50bp to 5.75%. The markets have taken this news very well with stocks reversing early loses and piling on gains. It is VERY important for the markets to hold these gains today. I must admit I am not sure they can do it. Banker has been on vacation all week (and next week also) and has been watching the markets with only one eye. Although the devistation seems alot less when you do not look at the screens all day, the nervousness that I view on the TV (CNBC etc etc) is real. This cut in rates is important, it shows that the Fed is

1. Taking the current situation very seriously

and more importantly

2. Taking the lead in the financial markets by being the first CB to officially cut rates.

I think the markets needed that. Time will tell of course but for now I think (and hope and pray) we may have pacified the markets at least short term. Financial stocks are very bid this morning and look for Wells Fargo to lead the way higher after some very bullish talk from Jim Cramer last night.

Good Luck and Good Forex trading. I am off to the beach to work on my tan.