The stunning cut was the second to be made between FOMC meetings and the fourth 50 basis point cut this year. The equities markets rejoiced but the bond market fell into utter confusion as did the currency markets. Both had priced an inter-meeting move out of the market when the Fed didn't act after the weak employment and consumer confidence reports. Things are still being sorted out there. The equities markets, which were showing signs of stabilizing prior to the move, took off - and what was even better they kept on climbing the day after. On Friday, the temptation to take profits combined with double witching eroded the week's gains.

Oh yes, as for the economic indicators this week, there was good news and so-so news. Three key economic indicators were reported early in the week. Industrial production unexpectedly rose while the consumer price index remained benign - both good news. The merchandise trade deficit fell markedly - also good. But the improvement came on weak import demand by both consumers and industry. This implies generally weak U.S. domestic demand. Potentially this can have negative repercussions throughout the world especially in those countries dependent upon exports to the United States.