In a surprise move, the Federal Reserve has cut the federal fund rate by .75 percent down to 3.5 percent after a global sell off occurred in overseas markets. The Martin Luther King day holiday had US markets closed allowing the Fed to take this preemptive move.
It will be interesting out there when the market opens. Analysts were calling for as much as a 500 point drop at the open in the DOW Industrial Average. I guess my post that the Federal Reserve Expected to Cut Interest Rates at End of January, 2008 was prophetic. 
The Fed said it was cutting the federal funds rate, the interest that banks charge each other on overnight loans, to 3.5 percent, down by three-fourths of a percentage point from 4.25 percent.
The Fed action was the most dramatic signal it can send that it is concerned about a potential recession in the United States. It marked the biggest one-day move by the central bank in recent memory.
The Fed decision was taken during an emergency telephone conference with Fed officials on Monday night. Those discussions occurred after global financial markets had plunged Monday as investors grew more concerned about the possibility that the United States, the world’s largest economy, could be headed into a recession. via Yahoo! Finance.
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It was surprising that the rate was cut 3/4 of a point as this is more than they have done in the recent past. I don't think it comes as any surprise though that the Fed made this move.
lets hope that this will save a few foreclosures and start giving more people the incentive to start buying homes again. I am all for correcting the huge imbalance we have in the housing supply and demand curve.
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