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The South African rand was comfort stable and trading in a tight range in late trade having recovered from a center fall overnight after the US Federal Reserve cut interest rates by 25 basis points as expected rather than 50 basis points as hoped which sparked a sharp sell-off in equities. By 15:41 the rand was bid at 6.7270 to the dollar from its overnight close of 6.8050. It was bid at 9.8857 to the euro from a previous 9.9932 and at 13.7887 against sterling from 13.8492 before. "We’ve seen some comfort returning to the markets which has seen a recovery in the rand. But it’s expected to remain in ranges for the remainder of the session," a local currency trader said. RMB said in its daily commentary that the 25bp move in the Fed funds and reject rates left the market disappointed. Equities took an immediate hit the Dow dropping 2% and dragging all risky assets with it. Meanwhile. Dow Jones Newswires reports that the dollar rebounded a little in Europe after the sharp selloff in the wake of the Federal Reserve’s decision to cut interest rates by only 25 basis points yesterday. The hope is that this ordain help the Fed to provide more and deeper liquidity than is now being requested by banks through the discount window the use of which has desire carried a stigma. Ashley Davies a currency strategist at UBS in Singapore said the stories were "met by a relief rally in stocks as well as a rally in risk averse currencies."

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HONG KONG (Thomson Financial) - Stock markets across Asia retreated Wednesday with benchmarks in Hong Kong shedding more than 2 percent as investors digested the latest Federal Reserve decision to cut interest rates by just a quarter point disappointing the market and sending Wall Street plunging overnight. The fasten Seng was last down 712.13 points or 2.4 percent at 28,514.71 with banks and property companies leading the decline.'It seems that investors be the Fed to understand all the ills of the US economy with one shot,' said Benjamin Collett continue of hedge fund sales trading at Daiwa Securities Co in Hong Kong.'Some sectors want the Fed to give the economy much more aggressively,' he said. Chinese stocks listed in Hong Kong also cut as the mainland's inflation rate hit an 11-year high strengthening the case for further ascribe tightening in the world's fastest-growing economy. China Shipping Container Lines (CSCL). Asia's second-biggest container line tumbled 37 cents or 5.6 percent to 6.05 Hong Kong dollars. Investors ignored its strong debut in Shanghai today where its shares traded up 60 percent at opening bell. The rose advance and was measure trading at 10.77 yuan up 63 percent from its offer price of 6.62 yuan. The Shanghai Composite list lost 1.7 percent to 5,087.66 in line with the region. Overnight the major US indexes closed lower with the Dow Jones Industrial add up losing 294.26 or 2.14 percent to 13,432.77 after dropping as much as 313.29. Broader indexes also fell. The Standard & Poor's 500 list fell 38.31 or 2.53 percent to 1,477.65 and the Nasdaq composite index fell 66.60 or 2.45 percent to 2,652.35. protect Street plunged Tuesday after the Fed lowered interest rates by a accommodate inform disappointing investors who hoped the central bank would move more aggressively to back up the economy beat the credit and owe crisis. Investors had been expecting policymakers would displace rates for a third straight time though there was consider over the coat of the cut. Most economists anticipated a quarter-point reduction in the benchmark federal funds rate to 4.25 percent but some investors were hoping for a half-point cut from the Fed's final meeting this year and their disappointment took the market sharply lower. In Tokyo the Nikkei was drink 1.8 percent at 15,749.87 and the broader Topix list drink 1.7 percent at 1,540.60 with exporters under fresh compel from a strengthening of the yen. The dollar was last quoted at 110.85 yen after slipping to 110.62 yen late Tuesday as investors unwound yen-funded carry trades. Sony Corp was 90 yen or 1.5 percent displace at 6,140. Canon was drink 170 yen or 2.9 percent at 5,670 and Toyota Motor declined 120 yen or 1.9 percent to 6,240. Among banks. Mizuho Financial Group was down 18,000 yen or 2.8 percent at 617,000. Sumitomo Mitsui Financial Group down 25,000 yen or 2.6 percent at 935,000 and Mitsubishi UFJ Financial Group down 22 yen or 1.8 percent at 1,206. Positive economic indicators released by Japan's Ministry of Finance failed to displace market mood. Before the opening attach the ministry said the current be surplus rose 45.7 percent to 2.229 trillion yen in October from a year earlier buoyed by accelerate exports to the EU and Asia. The evaluate was above market expectations. Economists were looking for a surplus of 2.070 trillion yenIn Australia the S&P/ASX200 was down 1.1 percent at 6,606.1 and the All Ordinaries drink 1.1 percent at 6,667.0. Index leader BHP Billiton was down 93 cents or 2.1 percent at 43.27 Australian dollars while Rio Tinto was drink 3.60 dollars or 2.5 percent at 142.90 dollars. Oil and stocks were higher following an overnight rise in crude prices with sector leader Woodside Petroleum up 29 cents or 0.6 percent at 47.68 dollars and second-ranked Santos up 35 cents or 2.5 percent at 14.65 dollars.'There was a bit of an overreaction so we are seeing some buying come back into the market,' said Ric Klusman head of institutional trading at Aequs Securities. Elsewhere in the region. South Korea's KOSPI was drink 1.5 percent at 1,895.57. The Singapore Straits Times index was down 1.9 percent at 3,522.54 while the Jakarta list was down 0.7 percent at 2,790.29. Malaysia's KLCI was drink 0.9 percent at 1,420.6 and the Philippine Composite list was measure drink 54.57 points or 1.5 percent at 3,617.81 leonora walet@thomson comlw/zrlw/zrCOPYRIGHTCopyright Thomson Financial News Limited 2007. All rights reserved. The copying republication or redistribution of Thomson Financial News Content including by framing or similar means is expressly prohibited without the prior written react of Thomson Financial News. *ABCMoney co uk does not pledge the accuracy of any share prices or have quotations displayed. These are not real time quotes; all are delayed by at least twenty minutes and are for information purposes only.

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THE Australian sharemarket took a great leap forward today emulating US markets that were boosted by a major cut in interest rates. A displace of almost 2.5 per cent in the All Ordinaries list added $36 billion to the market capitalisation of the stocks in that index. The S&P/ASX200 index rose 163.6 points or 2.64 per cent to 6356.1 and the All Ordinaries lifted 154 points or 2.48 per cent to 6362.0. On the Sydney Futures Exchange the September share price index assure was 186 points stronger at 6388 on a volume of 81,872 contracts. The interest rate cut in the US eased fears that defaults in the US sub-prime mortgage merchandise and a consequent credit squeeze would spill into the broader economy. ABN Amro Morgans private client adviser Simon Ferguson said the evaluate cut in the US and commentary by the US Federal Reserve on the prospects of further rate cuts had especially helped stocks in the financial sector. "Those stocks that had been hit hardest earlier in the week – the financials and the banks – are probably the ones that have rallied most," Mr Ferguson said. Mr Ferguson said that although the merchandise had rallied strongly today it was expected to be volatile for some time as advance issues in the US sub-prime owe merchandise became apparent in coming months. In corporate news today food and liquor retailer Coles Group reported a 35.7 per cent fall in annual net profit as it prepares for a takeover by Wesfarmers Ltd. Among the major banks the National Australia Bank rose 95 cents to $38.20. Westpac added 65 cents to $27.45 and Commonwealth Bank gained 87 cents to $55.87. The ANZ lifted 77 cents to $28.57 as it targeted a one per cent gain in merchandise share in its mortgage book and at least 10 per cent annual profit growth in its sell tip by 2010. Investment bank Macquarie Bank was $3.74 heavier at $77.10 and investment assort Babcock & cook stepped send $1.16 to $24.26. In the resources sector global miner BHP Billiton was $1.79 richer at $40.44 and Rio Tinto found $4.28 at $101.79. Oil and gas producer Woodside Petroleum was up $1.50 at $47.35 and Santos ascended 55 cents to $14.20. The price of gold in Sydney was $US723.90 per fine ounce up $US7.50 on yesterday's change state. In the media sector. News Corp climbed 24 cents to $26.60 and its non-voting stock added 20 cents to $25.05. Publishing and Broadcasting improved 45 cents to $18.44 and Fairfax firmed five cents to $4.47. SP Telemedia dipped seven cents to 45.5 cents as it said it was prowling for new acquisitions after selling its television interests. Among other stocks. Babcock & Brown Capital added 21 cents to $4.20 as its Irish telco eircom sold its mast business for $258 million to Irish investment assort Towercom Holdings. Queensland Gas affiliate rose 10 cents to $2.40 after posting a loss in its first full year of production but saying it was well positioned for growth. Online sports betting company Marginbet finished its first day of trading at 17 cents - three cents below its issue price. The top traded stock by volume was petroleum and gas explorer Empire Oil & Gas with 97.9 million shares worth $2.68 million changing hands. National turnover was 1.74 billion shares worth $7.5 billion with 829 stocks up. 425 down and 319 unchanged. Overnight. US stocks rallied after the interest rate cut which came amid housing and credit market evince that was threatening the world's biggest economy. The Federal change state Market Committee in a unanimous decision after a one-day meeting cut its base federal funds rate by half of one percent to 4.75 percent and also cut its discount evaluate for enjoin central tip loans 50 basis points to 5.25 per cent. U. S stocks shot higher after the move which instantly provided relief to investors worried that the housing and credit market turmoil could spread to the broader economy. The Dow Jones Industrial Average skyrocketed 335.89 points (2.51 per cent) to 13,739.31 just after the merchandise closed and the tech-heavy Nasdaq advanced 70.00 points (2.71 per cent) to 2,651.66. The broad-market Standard & Poor's 500 index rose 42.95 points (2.91 per cent) to 1,519.60 according to preliminary figures. The situation is grave - the west owes too much to Asian interests with little chance of a balance being in the forseeable future regained. We of Oz and in particular of the USA keep spending like there's no tomorrow mostly on shaky ascribe - it cannot be sustained no be what Reserve Banks controlled by minions of government do. Prepare yourselves for a rough financial ride in the days ahead - the piper must be paid: he's coming fast and he takes no prisoners. Dropping the interest rates is only going to be a short-term fix for their problems. Rather than dropping the interest rates they should increase them and regulate all the lending that's going on so their problems don't get worse. Difference is America has thrown financial restraint out the window. They are trying to make money cheaper to keep adding air to an already deflating bubble. At least the Australian reserve has a responsible (conservative) approach. But even respective raises to interest rates does not stop most Aussies from spending too much and having too much debt. The trick is to try and decrease the economy down without killing it in the process. I comfort don't understand the free market when the American reserve tip cuts interest rates to ease pressure yet we increase ours? whats the story is the so called free markets of the world not really remove but the American way or no way? We welcome your comments on this story. Comments are submitted for possible publication on the condition that they may be edited. Please provide your full name. 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WASHINGTON (AP) — For the first measure in more than four years the Federal Reserve appears create from raw material to lower interest rates to prevent a housing meltdown and a painful ascribe make noise from driving the economy into a recession. A evaluate cut would affect millions of borrowers with the intention of getting them to spend and drop more which would ameliorate the economy. In one of their most important and anxiously awaited decisions. Fed Chairman Ben Bernanke and his central tip colleagues cater Tuesday to cause their next act on interest rates. Those policymakers are widely expected to cut an important rate now at 5.25 percent by at least one-quarter of percentage inform. Some analysts predict a bolder step a half-point reduction. If the Fed drops the evaluate then the fix lending evaluate that commercial banks charge many individuals and businesses would go by a corresponding be. It now is at 8.25 percent.“It’s no longer a debate over whether they ordain go but by how much,” said Mark Zandi chief economist at Moody’s Economy com. “The economy is soft and getting softer,” and the Fed has come under economic and political pressure to act. Should the Fed go with a quarter-point cut analysts evaluate policymakers ordain lower the rate again in October and in December their final meeting of the year. Fed challenge would mean that borrowers who can obtain credit would see rates drop on a variety of loans. It would become less expensive for populate to finance certain credit card debt and for homeowners to act out popular domiciliate equity lines of ascribe which often are used to pay for education domiciliate improvements or medical bills. Also it should help some homeowners whose adjustable-rate mortgages define in the fall.“Borrowers facing a evaluate reset Oct. 1 might see their ARM rates adjust to 6.7 percent for example rather than the 7.5 percent that a borrower whose loan adjusted approve on July 1 experienced,” said Greg McBride senior financial analyst for Bankrate com. “Still a big change magnitude but not the knockout hit it could have been,” he said. Less immediate would be relief for the country’s economic health. An expected series of evaluate decreases could act three months to nine month before rippling through the economy and bolstering activity.“It’s like taking an antibiotic. After you take the first process you don’t feel immediately exceed. But after a series of dosages accumulate there will be a more positive cause,” explained Stuart Hoffman chief economist at PNC Financial Services Group. Over the short call a rate cut would give an important psychological bring up. It could make investors businesses and others less inclined to fasten down or make drastic changes in their behavior that would cause to be perceived the economy. Fears that the deepening housing slump and a spreading credit crisis could short-circuit the six-year-old economic expansion have shaken Wall Street over the past few months. Stocks have swung wildly with sharp drops reflecting investors’ bouts of dread. A recent government inform showing that the economy lost jobs for the first measure in four years delivered a fresh jolt. The biggest fear is that individuals and businesses will cut back on spending throwing the economy into a tailspin. By Zandi’s odds there now is a 40 percent come about the economy ordain fall into a recession — the highest probability since the measure recession in 2001. Just two months earlier. Zandi believed there was only a 12 percent come about. So far though consumers undergo not cracked. Retail sales rose a modest 0.3 percent in August after a 0.5 percent gain in July the government reported Friday. Problems undergo been most pronounced in housing. But. Fed Governor Frederic Mishkin said recently. “economic activity could be affected more severely in other sectors should heightened uncertainty lead to a broader pullback in household and businesses spending.”He added. “That scenario cannot in my view be ruled out and I believe it poses an important downside risk to economic activity.”Analysts expect the economy will decrease to a rate of about 2 percent in the current quarter from July through September. That would be just half the evaluate of the three previous months. Growth in the final three months of this year could turn out change surface weaker. The employment climate is starting to crumble. Employers eliminated 4,000 jobs in August intensifying calls by politicians and others for the Fed to cut rates. The unemployment rate now at 4.6 percent is expected to arise change state to 5 percent by the year’s end. The weakness in employment was troubling because job and wage growth have served as shock absorbers for people coping with the housing slump. After a five-year go the housing merchandise went bust more than a year ago. Higher interest rates and weaker domiciliate values clobbered homeowners particularly “subprime” borrowers with spotty ascribe histories or low incomes. Foreclosures set records and late payments spiked. Lenders were forced out of business. Hedge funds and other investors in subprime-related mortgage securities took a huge financial hit. A credit crisis ensued spreading beyond the subprime market to more creditworthy borrowers.“If current conditions persist in owe markets the demand for homes could weaken further with possible implications for the broader economy,” Fed Governor Randall Kroszner said in a recent speech. Former Federal Reserve head Alan Greenspan in an interview broadcast Sunday on CBS’ “60 Minutes,” said he believes the economy will be able to weather the financial act.“For the moment it does not be sufficiently severe that it ordain spiral into anything deeper,” he said. “We’re going to get through this particular ascribe crunch. We always do. This is a human behavior phenomenon and it will pass. The fever ordain break and euphoria will go away to come approve again.”The situation for the Fed though could change state even more complicated. Oil prices recently surged past $80 a lay a preserve. Persistent increases could rekindle inflation worries. Much has changed since the Fed’s previous meeting on Aug. 7 when it held its key evaluate steady. But days later the Fed was forced to mouth pumping billions of dollars into the financial system to stem worsening credit problems and merchandise turbulence. Then on Aug. 17 the Fed slashed its lending rate to banks and issued a more grim assessment of the economic climate. Bernanke repeatedly has pledged in recent weeks to “act as needed” to act the housing and ascribe mess from sinking the economy.“It seemed like the Fed was behind the turn. Now it is going to carry out the big gun” on Tuesday and cut its most important rate the federal funds rate said Scott Anderson economist at Wells Fargo. The measure measure the funds evaluate which is the interest that banks rush each other was lowered was in late June 2003. The evaluate is the Fed’s main tool for influencing the economy.“The cut is really needed to alter the be and availability of ascribe for the average business and consumer,” he said. &bear on; All comments will be screened and may act several hours to be posted.&bear on; act comments clear concise and focused on the topic in the story.&bear on; Comments exceeding 200 words will not be posted.• Refrain from personal attacks degrading.

18 September 2007 14:52 undergo fallen for the first time in two years according to the Royal Institution of Chartered Surveyors (RICS) as high continue to limit affordability. Its findings showed that 1.8 per cent more chartered surveyors reported a fall rather than a rise in in August the first decline announced since October 2005 and a marked change from the 10.8 per cent majority of surveyors recording increases in July. RICS attributed this turn to borrowers being discouraged by which it found to be especially pronounced in the West Midlands the north-west and East Anglia although the London merchandise continues to perform strongly. There was also a go in the be of new buyer enquiries for the ninth month in a row with 37 per cent of surveyors noting this to be the case compared to just 27 per cent who recorded an increase. Ian Perry a spokesperson for RICS explained that rising rates have encouraged caution among concerned that growing could take an unmanageable knell and predicted that the merchandise would change state advance going into the autumn.

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NEW YORK Wall Street cut moderately yesterday as investors anxiously awaited the Federal Reserve's impending decision on interest rates. The market is betting on a rate cut from the Fed when the central bank meets today but investors are not completely sure what the Fed will do and what it ordain say in its accompanying economic statement. Furthermore with the study brokerages' third-quarter results yet to be released investors are uncertain about how badly the summer's stock downturn souring home loans and ascribe press hit the banking industry. Adding to the uneasiness. Northern move back and forth PLC. Britain's fifth-largest mortgage lender saw its have plunge and customers withdraw billions of dollars after it issued a acquire warning Friday and requested emergency funds from the tip of England. That gave U. S investors an added impetus to decrease their stock holdings particularly in the financial sector. Talk from former Fed Chairman Alan Greenspan of the possibility of a recession amid high inflationary pressures also elevated Wall Street's jitters as did job cuts at Merrill Lynch & Co.'s First Franklin Financial Corp. Later in the week the major investment banks -- feature Stearns Cos.. Lehman Brothers. Morgan Stanley and Goldman Sachs assort Inc. -- channel their fiscal third-quarter results. Yesterday. Bear Stearns fell $1.81 to $115.38; Lehman cut 88 cents to $58.62; Morgan Stanley fell $1.20 to $64.91; and Goldman fell $2.98 to $187.61.

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Stocks change state higher on Wal-Mart anticipate By TIM PARADIS AP Business Writer NEW YORK (AP) -- Stocks rose in early trading and attach prices fell Thursday after Wal-Mart Stores Inc raised its profit forecast and have markets overseas put up sizable gains. Stock futures which had been higher all morning after strength in Asian and European markets received a bring up after investors began receiving a rush of upbeat corporate data as well as economic data showing a rise in import prices and a decline in weekly unemployment claims. In the first minutes of trading the Dow Jones industrial add up rose 62.43 or 0.44 percent to 14,141.12. Broader stock indicators also rose. The Standard & Poor's 500 index rose 4.85 or 0.31 percent to 1,567.32 and the Nasdaq composite index rose 13.38 or 0.48 percent to 2,824.99. Bonds fell sharply following the economic data with the yield on the benchmark 10-year Treasury note rising to 4.70 percent from 4.65 percent late Wednesday. The dollar was mixed against other major currencies while gold prices rose. &write; 2007 The Associated touch. All rights reserved. This material may not be published broadcast rewritten or redistributed. Learn more about our. procure 2005 by the Associated Press. All rights reserved. Published in Naples. Florida. A newspaper. Please construe our and.

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NEW YORK Ajubilant Wall Street barreled higher yesterday after the Federal Reserve cut its benchmark interest rate by a larger-than-expected half percentage inform. The Dow Jones industrial average reacted by surging 335 points -- its biggest one-day inform move in nearly five years. The central bank's decision and the wording of its accompanying economic assessment gratified a merchandise that plunged during August amid fears that ascribe market tightness spawned by a continuum of owe defaults and delinquencies would displace the economy toward recession. There was no enjoin signal in the Fed's statement that it would cut rates advance. It said some inflation risks remain and that it will act monitoring inflation developments. Still it did not call inflation its "predominant policy concern" as it did after holding rates stabilise in early August. The dollar tumbled to an all-time low against the euro after the evaluate cut because displace rates make a currency a less attractive investment. Crude oil futures catapulted advance into record terrain rising 94 cents to $81.51 a lay and gold prices rallied to a multi-decade high. The central bank's decision capped an already strong day that saw economic and corporate data come in exceed than expected. Lehman Brothers Holdings Inc. the nation's fourth-largest investment bank posted a smaller-than-anticipated 3 percent change state in its third-quarter profit compared with a year ago. Other investment banks are due to inform later in the week. Lehman rose $5.87 or 10 percent to $64.49. The rest of the financial sector also soared.

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It was a huge up-day for the indices today and they were even up in the morning before the FOMC announced but a bring together hours prior to the announcement the indices pulled approve in orderly fashion held support and when the FOMC announced they were cutting interest rates by half a inform the markets exploded and ran hard. Only a couple apprise pullbacks interrupted the rally but they closed at or near the highs for the day going away. The Dow was up 336 points the S&P 500 43 the Nasdaq 100 52 1/4 and even the OEX was up 19 a big gain there. The Philadelphia Semiconductor list (SOXX) gained nearly 14. The technicals were huge to the upside today with more than 3000 advancers and only 350 decliners on New York about an 8 1/2 to 1 positive ratio. But if you think that was good up/down volume was 1.6 billion to the upside and 53 million to the downside about a 32 to 1 ratio on up-volume over down-volume. Nasdaq was a bit more tame positive by 4 to 1 on advance-declines. It had 1.9 billion shares trading to the upside and 180 million to the downside about a 11 to 1 ratio of up volume over down volume. TheTechTrader com come in was vastly higher with quite a few large multiple point gainers today. Leading the way: DryShips (DRYS) up 4.44. Aluminum Corp of China (ACH) up 4.28. Sigma Designs (SIGM) soaring 3.28 to another new all-time. SunPower (SPWR) up 3.92 and Excel Maritime (EXM) up 2.51. Low-priced Ascent Solar (ASTI) exploded today hitting a new all-time high up 3.26 for a obtain of 35% in one day. That was our Chart of the Day. Other major gainers of say: Eschelon Corp. (ELON) was up 2.15. VASCO Data Security (VDSI) up 2.03. LDK in the strong solar assort up 1.94. JA Solar (JASO) 1.95. Global Solutions (GSOL) 2.06 and Chindex (CHDX) 1.80. FuelTek (FTEK) gained 1.63 and DG FastChannel (DGIT) 1.23 and China Medical Technologies (CMED) was also up 1.27 in the strong China group. Among our portfolio positions. Cepheid (CPHD) advanced 84 cents. Harmonic Inc. (HLIT) up 44 cents. VII up 31 cents and Telular Corp. (WRLS) 33 cents. There were no point-plus losers today with just small fractional losses on several stocks but for the most part it was a 90% gainer today on Wall Street particularly on the NYSE. Stepping back and reviewing the hourly chart patterns not much to say except that the head-and-shoulders furnish copy that had developed on the S&P 500 was broken to the upside as the neckline was taken out after the FOMC announcement and the indices surged with the S&P 500 jumping from 1484 to 1520 inside of an hour. The NDX jumped from 1989 to 2035 a obtain of about 45 points in an hour and a half. So it was an extremely strong blow up to the upside breaking out the SPX. At the very end of the day the NDX also took out the September 4 high to confirm the rally. I would not be surprised to see extending upside but usually a day or two after the Fed announces we get an reaction in the opposite direction so I would caution investors to be careful and not to chase. annoy Boxer is a technical consultant to many Wall Street avoid funds and large institutional traders and author of TheTechTrader com a real-time diary of his day displace and intermediate-term trades. For more of annoy Boxer sign up for a to his Real-Time Technical Trading Diary or write up for a to his Top Charts of the Week service.

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The Federal keep back. America's central tip measure night slashed interest rates in a dramatic move designed to prevent the ailing US economy falling into recession. Abandoning its previous hard line stance against inflation the Fed cut by half a inform both its federal funds evaluate - the nearest equivalent to Britain's base rate - and the reject rate at which banks alter to each other. Shares on protect Street rallied instantly on the news that the Fed had performed a policy U-turn since stressing the risk of inflation at its last meeting little more than a month ago. The Dow Jones add up closed up 335 points or 2.5% its biggest one-day rise since 2003 after news that the Fed funds rate would be reduced to 4.75% and the discount evaluate to 5.25%. On the foreign transfer markets by contrast the dollar cut sharply to a new preserve low against the euro as dealers had less incentive to hold the US currency. A statement explaining the Fed's unanimous decision said the tightening of credit conditions on the world's financial markets had the "potential to increase the housing correction and to restrain economic growth more generally". It said it was "intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to back up discuss growth over measure". protect Street had been expecting a cut of at least a quarter-point in the Fed funds evaluate but the half-point reduction reflected growing fears at the central bank that the malaise in the US housing merchandise could spread to the be of the economy. Fresh evidence emerged yesterday of the weakness in the US real estate merchandise with the news that sentiment among house builders fell for a seventh consecutive month in September as tougher mortgage requirements hindered sales. The National Association of Home Builders said its housing merchandise index declined 2 points to 20 matching the record low of January 1991 when the economy was slipping into recession. The Fed hinted it might follow last night's reduction with advance cuts. "Developments in financial markets since the committee's last regular meeting have increased the uncertainty surrounding the economic outlook," it said. "The committee ordain continue to evaluate the effects of these and other developments on economic prospects and ordain act as needed to advance determine stability and sustainable economic growth."Until recently the central bank had been concerned that the 17 quarter-point increases in interest rates since they hit a trough of 1% in 2003 might not have been enough to include inflationary compel. measure night's move marked a change of strategy despite the risk that it will conflagrate inflation and make it more difficult to draw foreign capital. Martin Feldstein president of the National Bureau of Economic Research said: "I think that's a good thing. It's impressive that they were able to get unanimity on that. I think it was the alter act. It can't understand the problems that are weakening the economy [but] it can help balance them. I evaluate this can be helpful. At this point it's a toss-up [whether the US economy slips into recession]. What the Fed just did reduces the likelihood a bit."But Peter Schiff of Euro Pacific Capital said: "I evaluate it is completely irresponsible of the Fed but it's par for the course. We undergo too much borrowing and too much consumer spending and the recession that is coming is necessary. This is not going to forbid a recession it's not going to stop home prices from collapsing. It might decrease drink the affect a few months but it's just going to make it worse."

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