Article & Journal Resources

Word Count: 835

The Federal Reserve cut interest rates again yesterday, and equity markets promptly sold off because it was only a 25-basis-point reduction. This is probably good, if paradoxical, news. The Fed has become so Pavlovian in its response to Wall Street's begging that even this modest declaration of independence is a welcome reminder that easier money is not the solution to every economic problem.

Wall Street's argument is that the housing recession and credit crisis threaten a larger downturn. The 30-day T-bill rate (under 2.9%) has sunk far below the fed funds rate of 4.25% after yesterday, so the Fed is ...