By Evelina M. Tainer, Chief Economist, Econoday
8/24/01

The Federal Reserve's open market committee, to no one's surprise, cut the federal funds rate target by 25 basis points on Tuesday. The initial impact on the equity market was not altogether friendly. With a lag, the market rallied, but whether it will extend that rally in the week ahead is another question entirely. Rate cuts this year have only had an ephemeral impact on stock market movements. Even the reaction in the bond market was relatively muted.