The Fed's Statement.
The cut in the federal funds rate pushes it to its lowest level on records dating to July 1954, and the central bank said it would likely keep it at "exceptionally low levels for some time."
The most remarkable thing is that the Fed is now one of the largest and most important commercial banks of all time. This morning’s statement said that early next year the Fed will begin extending “credit to households and small businesses”. It is also “evaluating the benefits” of buying long term Treasury securities”.
Adam Carr of Australia's IPAC Securities:
"The Fed cut the funds target to a range of 0 to 0.25% this morning, from a fixed target of 1%. On the surface the adoption of a range sounds very exciting, but in reality with the actual Fed rate at 0.0625% it’s kind of meaningless in practical terms. The Fed is merely recognising reality, given the fed rate has been undershooting the target for some time now - it didn’t matter what the magnitude of the cut was."
Adam Carr is right.
Here is a chart of the "Fed Funds Rate" target overlayed with the actual rates reached in the market:
The Fed had lost control anyway.