The markets are demanding another rate cut, and this week they're likely to get it. Throughout the past week, investors in both stock and bond markets have shown how much they want more relief in the form of lower interest rates. Recently released economic data and Fed officials have put up no road blocks to suggest otherwise. The question remains what good it will do for the struggling parts of the marketplace. Right now, the biggest questions along those lines are being asked about asset-backed securities tied to mortgages and the banks that hold them on their balance sheets or in off-balance-sheet funds -- including Merrill Lynch ( MER), Citigroup ( C), Bear Stearns ( BSC), Goldman Sachs ( GS) and Morgan Stanley ( MS). According to the fed funds futures market, investors price in a 100% chance of a single 25-basis-point rate cut at Wednesday's meeting of the Federal Open Market Committee, according to Miller Tabak. There are just 8% odds of a 50-basis-point rate cut next week, going by Miller Tabak's numbers. "Right now, the idea behind the Fed cutting rates is appeasing the markets," says Drew Matus, senior economist at Lehman Brothers. "Unless the Fed makes very clear they're done, the markets will force their hand over and over." The stock market would clearly welcome more cuts. After being rocked by news of Merrill Lynch's staggering $7.9 billion writedown Wednesday, stocks rallied back from a sharp decline on a rumor that the Fed was convening an emergency meeting of the Federal Open Market Committee to slash interest rates.