This Could Take Awhile: Little Has Changed Since the Fed Started Cuts

Six months of rate cuts, and whaddya get? So far, six months older, and deeper in debt.

The Federal Reserve started its series of cuts in the fed funds rate a little more than six months ago, and not much has changed. The stock market averages are still flailing and economic conditions are mixed.

The general mood among investors remains a mix of that eternal optimism to envision good things coming around the corner, and to shake their fists at the Federal Reserve for reacting too slowly, or not simply giving out C-notes to anybody walking around on the Street. Of course, this is when one would take care to remember that it takes more than six months for interest rate cuts to work their way into the economy. And when the Fed first cut rates Jan. 3, in a surprise move that dropped the funds rate to 6% from 6.5%, its monetary policy was arguably still tight and choking off economic growth.

Now, it's hard to argue that at 3.75% the fed funds rate is restricting the economy. It's likely that the Fed is nearly finished with its series of cuts. It's even possible that they are done, opting not to cut rates at the August meeting. ...