Traders Scoff at Cut

Updated from 2:18 p.m. EST

The Federal Reserve disappointed the markets Tuesday by offering up a meek policy decision that seems both behind the curve and mired in inconsistency.

The central bank cut the federal funds rate a quarter-point to 4.25% and the discount rate 25 basis points to 4.75%. It is the third consecutive meeting that the central bank's Federal Open Markets Committee has slashed rates, amid unforgiving credit markets that make it difficult for firms to borrow money.

"Mr. Bernanke blew it," says James Bianco, president of Bianco Research. "The Fed should have cut the discount rate to the fed funds rate or lower." ...