Wall Street's mood is significantly better now than it has been in recent days, after the Federal Reserve surprised the markets by cutting its discount rate by an aggressive half-percentage point, from 6.25% tp 5.75%.
CNBC's Jim Cramer came on Squawk on the Street at the open Friday celebrating the Fed's move ("They nailed it!") for fending off what he thinks would have been a thousand-point Dow plunge and and predicting "we will be up the most (Dow points) we've ever been in history today." (Of course, who can forget Cramer's 'They know nothing' rant of just two weeks ago, calling for a Fed rate cut?)
Stocks did indeed respond. After an opening surge of 300 points, the Dow ended with a gain of 233 points. Not the best ever, but nothing for the bulls to complain about.
(If you're still feeling jittery, check out our special "Survival Guide Edition" of The Heat.)
To be clear, we're talking about the discount rate (direct loans to banks), not the more important federal funds rate (overnight loans between banks.) The Fed's target there remains at 5.25%, where's its been for more than a year.
But, at least for now, the markets are taking the move as a strong signal that Ben Bernanke and Company are on the job and ready to do what it takes to prevent catastrophe in the wake of the confidence crisis that emerged in the credit market in the wake of the subprime mess.
Just last week, the Heat asked, "Should the Federal Reserve come to the rescue of the financial markets by cutting interest rates?" Your responses were unusually emotional.
Now, The Heat asks: Did the Federal Reserve do the right thing by cutting the discount rate?
We've heard from 50 of Wall Street's top strategists, money managers and economists on the same question. The results of our Trillion Dollar Snap Survey show an overwhelming majority, 96%, of those responding think Bernanke got it right.
CNBC's Jim Cramer came on Squawk on the Street at the open Friday celebrating the Fed's move ("They nailed it!") for fending off what he thinks would have been a thousand-point Dow plunge and and predicting "we will be up the most (Dow points) we've ever been in history today." (Of course, who can forget Cramer's 'They know nothing' rant of just two weeks ago, calling for a Fed rate cut?)
Stocks did indeed respond. After an opening surge of 300 points, the Dow ended with a gain of 233 points. Not the best ever, but nothing for the bulls to complain about.
(If you're still feeling jittery, check out our special "Survival Guide Edition" of The Heat.)
To be clear, we're talking about the discount rate (direct loans to banks), not the more important federal funds rate (overnight loans between banks.) The Fed's target there remains at 5.25%, where's its been for more than a year.
But, at least for now, the markets are taking the move as a strong signal that Ben Bernanke and Company are on the job and ready to do what it takes to prevent catastrophe in the wake of the confidence crisis that emerged in the credit market in the wake of the subprime mess.
Just last week, the Heat asked, "Should the Federal Reserve come to the rescue of the financial markets by cutting interest rates?" Your responses were unusually emotional.
Now, The Heat asks: Did the Federal Reserve do the right thing by cutting the discount rate?
We've heard from 50 of Wall Street's top strategists, money managers and economists on the same question. The results of our Trillion Dollar Snap Survey show an overwhelming majority, 96%, of those responding think Bernanke got it right.
Source: CNBC.com
