By Evelina M. Tainer, Chief Economist, Econoday
3/23/01

Economic indicators generally took a second seat to this week's FOMC meeting when the Fed cut interest rates by 50 basis points. This should have been viewed as an aggressive move by the Fed, which has predominantly cut (or increased) rates by 25 basis points under Greenspan's helm. This was the third 50 basis point cut since the beginning of the year -- a considerable easing of credit conditions in a period when the economy is not in recession. Instead, market players pouted because the Fed didn't reduce the federal funds rate target by 75 basis points. Incidentally, the Greenspan Fed has never reduced rates by that magnitude, even during the 1990-91 recession. It did, however, raise rates once by 75 basis points in 1994.