FOMC action and market reaction

The FOMC cut the Fed Funds by 50bp, and the Discount Rate by 50bp as expected. It was the language of the meeting minutes that caused the lag in the time it took for the move to take place.

The Fed Funds Rate is now 1.0%
The Discount Rate is now 1.25%

The language of the announcement that caused the big move down was the FOMC said it would continue to "act as needed." It also just mentioned that the economy is slowing down, but they did not use the recession label.

That's pretty bland and banal language that really doesn't tip the Fed's hand since they are only 100 bp from going to 0% which would put the Fed in a non-action capable mode.

The 3 stage move played out with an initial move down, a reversal to fail to make new highs of the session, and then the 3rd stage back to the downside.

The rest of the day is now going to be based the "buy the rumor, and sell the news" meaning that the 50bp was already in the market price and now there is very little that future Fed action can do to stem the tide of the financial crisis as more and more houses go into foreclosure and real estate values continue to drop.

The market could slowly drift down over the next few trading days back to the SP 500 850 levels before too long since the Fed language suggested that the US and global economies are in a recession period and it could take up to 12-18 months to recover.