Fed cuts rate at discount window by 50 basis points, stock market will soar
The Federal Reserve cut the rate at the discount window this morning. This is the rate that banks can borrow at and is aimed at normalizing liquidity concerns and was designed to restore calm to the global markets.
Stock futures turned from down almost 200 points to up more than 200 points immediately after the announcement.
There was no change to the Fed Funds target rate currently at 5.25%.
Update, 5 minutes into trading, the Dow was up almost 300 points however 10 year Treasury Bonds were down with rates climbing from from 4.60 at the close yesterday to 4.72.
Countrywide's stock which was downgraded several days ago by Merrill Lynch was upgraded today by Banc of America Securities saying that the embattled mortgage lender can survive the liquidity squeeze. CFC was up sharply along with all the financials (I'm not sure every single stock is up but likely 99+%.)
Update, Market close, 4PM, Dow closes up 233, 10 year Treasury bonds improved with the rate down to 4.67 at the close.
NOTE: You may notice the post time as 8:12AM. The clock on the blog control panel is off by an hour since the Fed actually made the rate change announcement at 8:30AM.