A 75 Point Cut? A Week Early? The Fed Doesn't Mess Around!

The Fed jumps the gun, and annouces a huge rate cut a week early. Wow. Just.. wow. From today's FRB release:

The Federal Open Market Committee has decided to lower its target for the federal funds rate 75 basis points to 3-1/2 percent.

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.

The Committee expects inflation to moderate in coming quarters, but it will be necessary to continue to monitor inflation developments carefully.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Charles L. Evans; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Eric S. Rosengren; and Kevin M. Warsh. Voting against was William Poole, who did not believe that current conditions justified policy action before the regularly scheduled meeting next week. Absent and not voting was Frederic S. Mishkin.

Emphasis added by me.

Two thoughts:

1. William Poole is now my favorite Federal Reserve President.
   
   
2. I would love to see the data the Fed has that suggests inflation will moderate. Does this mean we will see a further decline in oil prices? Is it time to start shorting oil futures?