In the only emergency rate cut since 2001 and the biggest cut since the 80's, the Fed today cut it's main interest rate (the federal funds rate) by a whopping 3/4 of a point to 3.50%.
The Fed's standard cryptic statement said "Appreciable downside risks to growth remain," and continued that the Fed would "act in a timely manner as needed to address those risks." That's Fedspeak for "things are getting worse and we're cutting rates again in the future."
With international stocks tumbling badly yesterday, and Wall Street opening today down sharply, the Fed's emergency rate cut smacks of outright panic. Either that or they know something's coming in the near future that's worse news than yesterday's worldwide stock slump.
See additional news stories on the rate cut here, here and here. Or see my friend Shailesh Ghimire's comments. And for those of you actually home shopping right now, there's a silver lining. See my fellow bloggers at The San Diego Mortgage Rates Report who give daily advice on locking or not locking your home loan rate.