The credit markets are tightening further, banks are failing, the Federal Reserve is increasing lending to banks, and foreign banks are also beginning to experience problems.  At past meetings of the Fed, Ben Bernanke has discussed balancing the challenges of a slowing economy with worries about inflation.  One of the big drivers of infalation has been rising fuel prices.  With prices of crude oil below $100 and the strong possibility of reduced demand bringing it lower, inflation should be declining slighty.  It looks like it would be a good time to reduce rates, and reduce them quickly.

     The Federal Funds Rate is currently at 2 basis points.  The way the economy is heading, Bernanke should conisder an emergency cut of at least .5 basis points, and possibly one full point.  This would reduce the costs of lending, which would probably help the credit markets slightly.  It wouldn't cure the Nation's financial problems, but it would be a step in the right direction.