Economic news didn't reveal any surprises this week. The manufacturing sector continues to contract and housing activity is holding at fairly healthy levels.

The current consensus in the financial market is that Fed officials will vote to reduce the federal funds rate target by 25 basis points on Wednesday, at the conclusion of their two-day meeting. Greenspan has indicated his desire to front load rate cuts in order to maximize the impact on the economy. None of the economic figures released recently have been indicative of an imminent resurgence in activity. This suggests the Fed may want to act again to ensure a turnaround by the end of the year. Even if the Fed reduces the federal funds rate target by 25 basis points, it would stand at 3.75 percent, its lowest level since mid-1994.