75 bps cut, downside risk remains

--Fed Reserve cut its mai lending rate by 75 bps to 2.25 to prop up the faltering economy and restore confidence in the financial systems --75 bps us justified by tightening credit condition, softening labor market, slowing retail sales and industry production, and deepening housing slump. These factors will continue to weight on economic growth. --Fed has already put its $900 bil portfolio in the front line of market turmoil to starve off a collpase of brokerage firms. --The policy action will foter market liquidity, promote moderate growth and mitigate risks to economic activity. --Still downside risk remains. The downward housing prices and increasing home forecloures have not bottomed out yet. --Inflation has been elevated, but will moderate in the coming quarters, reflecting projected leveling-out of energy and other commodity proces and an easing of pressures on resources utilization.