The Cut

There is a lot of talk that the most recent fed cut was because of the sell off that was happening in the markets across the world. This might be the case but it was also an issue of the spread in the yields. If you look at the chart somewhere close to this post, you can see that the spread has closed up significantly. (People who buy longer term stuff need to be compensated for possible rise in rates thus the higher interest rate in longer term investments). This close to inverted curve indicates that traders are expecting are slowing of the economy. Great move by the fed in my opinion.

Chart taken from this great site.