The big news for the day was that the Fed cut interest rates to a record low, a move that had an effect on the stock market, of course. The Dow Jones industrial average jumped 4.2 percent, or 359.61 points. The Standard & Poor's 500 index advanced 44.61, or 5.14 percent, to 913.18, and the Nasdaq composite index rose 81.55, or 5.41 percent, to 1,589.89.

So, will this have any effect on the economy? According to iStockAnalyst, the reductions may help banks, but economists doubt it will increase consumer spending.

It's interesting what the author over at Trader's Narrative says about the Fed:

To put it bluntly, the Fed is punishing saving and rewarding spending and debt. With inflation running at ~1% anyone who saves money is a chump. Many money market funds now have a negative return (due to MERs).

Chuck says something similar and claims that the U.S. has become a "flat economy".

I'm not so sure that decreasing interest rates and pumping money into the system is really going to change anything. Ok, the price of gas has gone down somewhat, but people are still making the same amount of money, companies are still cutting jobs, and consumer products are still priced the same.

Photo Credit: Woodley Wonderworks