Fed Cuts Interest Rate by 0.75%, Following More Global Stock Tumult

Photograph of Federal Reserve Chairman Ben Bernanke pausing during testimony last week by Dennis Cook/AP

After an ugly Monday in global financial markets while the U.S. markets were closed and Asian stock markets plunging today, the Federal Reserve lowered the interest rate by 0.75% in an "emergency move for the first time since 2001." From the Fed's press release:

The Committee took this action in view of a weakening of the economic outlook and increasing downside risks to growth. While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households. Moreover, incoming information indicates a deepening of the housing contraction as well as some softening in labor markets...

Appreciable downside risks to growth remain. The Committee will continue to assess the effects of financial and other developments on economic prospects and will act in a timely manner as needed to address those risks.

, "This is what we were hoping for. While we would have rather seen this occur during market hours, maybe looking a gift-horse in the mouth isn't necessary...This won't fix all of the problems out there, but it's a start."

Still many don't believe it's enough, given that, as one CNBC expert, Joe Battipaglia of Stifel Nicolaus Private Client Market Strategist, said, "I don't think the Federal Reserve, nor the U.S. Treasury or the federal government can do much to change what we need to go through, and that is, a two-year cycle of housing and credit-market corrections, painful as that might be, along with a slump in the U.S. economy that will lead to more global difficulties in the course of the next nine to 12 months." And another, Cronus Futures' Kevin Ferry, predicts for today, "It's going to be a very, very violent first couple of hours, but we're not down a whole another session like everyone else. We were in front of this, and the rest of the world is, in fact, catching up to us, even though we were closed."

Update: The Dow fell by as many as 460 points this morning, but are now, at 12:15PM, about 116 points down (here's a live chart). How many points down do you think the Dow will end?