Disappointment in Fed Cut: Was it enough?

The Fed's interest rate cut of 0.25%, disappointed many investors, as concerns of recession, the housing slump and the credit crunch grow. Many investors believe that this cut in rates was not enough and 0.5% would have been more appropriate if the Fed was serious about avoiding recession.

The Fed's warning that the turbulence in global credit markets has led to more uncertainty in the economic outlook. This has led to bond traders pricing in a further 0.25% cut when the bank meets again on January 30th.

There is growing concern that the tight credit markets will increase the risks for an economy that is expected to grow a measly 1.8% in 2008.