• This is very constructive and I think it shows this country and the rest of the world that our central bank is nimble and can move quickly in response to market conditions. –Henry Paulson, Treasury Secretary

  • Don’t take today’s move as a sign that the FOMC is done. Given that the next scheduled FOMC meeting is not until late March and assuming the FOMC does not want to make a habit of inter-meeting actions we expect, as do the futures markets, the FOMC to cut the funds rate by another [half point] at their end of the month meeting with another cut in the discount rate likely as well. In short, the FOMC has taken their date to dinner, but till has to spring for the movie as well before they can expect any kind of payoff. –Richard F. Moody, Mission Residential

  • The Fed will cut rates again at next week’s meeting by either [a quarter of half percentage point]. The Fed has been unwilling to disappoint the market and fed funds futures are leaning very strongly toward a half-point cut next week. However, we disagree with the Fed over the longer-term outlook for inflation — to us, events have a strong stagflationary feel about them. –Bear Stearns

  • The recent turbulence in financial markets was the clear trigger for today’s action. In the wake of this move, a wide array of policy options now appear to be on the table for next week’s meeting. We suspect that the most likely outcome is another [quarter percentage point] rate cut — but, it is also possible that they will leave rates unchanged or cut more aggressively. … During the 1994 and 2001 policy cycles, intermeeting moves were always followed by further action at the next meeting … However, we do not believe that these comparisons are particularly relevant to the current environment. In all of these instances, there was a much longer lead time before the next meeting and all the other intermeeting moves were only a quarter or half percentage point. –David Greenlaw, Morgan Stanley

  • Let’s face it, cutting today rather than in eight days at the regularly scheduled FOMC meeting is meaningless in terms of the fundamental economic outlook. While a deteriorating economy obviously argued for easing at the upcoming meeting … there can be no doubt that the timing of this morning’s move is aimed at supporting global financial markets after yesterday’s global equity meltdown. The policy statement clearly indicates that the FOMC is prepared to ease further. Whether the next move occurs in eight days is difficult to say at the moment and could well depend on how markets react between now and then. –Joshua Shapiro, MFR, Inc.

  • We cannot rule out further aggressive action is possible as early as the next meeting. As of now, it will depend on how financial markets take this news. We see a [quarter] point rate cut as likely at the scheduled meeting next week, followed by another [three-quarters of percentage] point of easing through June (25 each in March, April and June). –Drew Matus, Lehman Brothers

  • The FOMC eased policy aggressively because of the weakening economy and the recent plunges in both domestic and international stock markets. The Committee is also likely to reduce rates again next week at their regularly scheduled meeting.–Steven A. Wood, Insight Economics

    Compiled by Phil Izzo