[Old_Mil]

I think this is a band aid. Cutting the discount rate half a percent is nowhere near enough to solve the looming disaster in the housing market. I don’t know if the Fed will end up cutting the prime rate 2 or 3 percent, but that’s what it’ll take to solve that problem...

...and, if they do cut it that far, there are other problems (inflation) that will set in.

[ExSES]

Cutting the discount rate half a percent is nowhere near enough to solve the looming disaster in the housing market.

I await the flood of posts which will accuse you of being unpatriotic and a democrat plant (that's what typically happens to anyone who is a realist and hasn't partaken of the Kudlow Koolaid!)

[Son House]

I also thought it strange cutting the discount rate to avoid a futher drop in the stock market, a political strategy to make it all look nice could only be temporary.

[NorCalRepub]

.you are right....it is a band aid....but more of a psychological one.....the fear and panic where so overblown and getting worse, the Fed stepped in mainly to say....yes, we get it.....the 90 day Treasury is like 3.5%.....very very low compared to Fed Funds....since the current credit debacle with it’s negative impact is Deflationary, I expect them to lower rates by 50 basis points....their neutral statement was correct....the current process was NOW much more deadly than any inflation....which is really curtailed except for energy and food.....this was a stabilizer.....

[Son House]

“the looming disaster in the housing market”

Disaster to the lenders or the buyers?

[dragnet2]

I think this is a band aid. Cutting the discount rate half a percent is nowhere near enough to solve the looming disaster in the housing market. I don’t know if the Fed will end up cutting the prime rate 2 or 3 percent, but that’s what it’ll take to solve that problem...

Agree...