What the Fed did…

Yesterday, the Fed came out and cut the Fed funds and discount window interest rates 75bps. With these cuts the Fed also gave a strong proactive statement indicating that there are more tools in the pipeline to ensure a strong financial system. Essentially, these cuts made money cheaper, but still not available. This is due to uncertainty among lenders to lend out money to borrowers. However, the effects of these rate cuts will be wide spread in bringing down the ARM re-fi. Essentially, keeping more people in their homes and less inventory in the market. The market reacted appropriately in yesterdays trading session with 420pt gain on the Dow and 51pts on the S&P. We will see if there is follow thru in today’s market. However, don’t be surprised if we are down for the day, with yesterdays substantial moves a flat-down day is a winner. I’ll be watching the tape…