It seems the lower rates obviously help businesses and decrease demand for debt instruments. This shift in preference by the investing market leads to a more successful stock market for those willing to invest in such uncertain times. While this change may be great for investors, it is truly sad that our economy must rely on intervention to save us from our own stupidity. Bernanke, in yesterday's address to the budget committee, stated something to the effect that it is not the job of the Fed to protect investors from their own decisions.
The stock market is currently in turmoil. The country hasn't seen sustained losses like this in many years. The housing disaster, fickle oil prices, and the falling dollar have caused investor uncertainty, causing the market to suffer the consequences. The market has fallen 2,000 points in a couple of months causing fear of a recession and a decrease in stock prices as demand for stocks falls. In a recent article, by Michael Sivy from Money Magazine (found here), a new perspective is provided about the Fed's ability to influence and affect not only rates but the stock market in general. He states that the markets do much better in times where the Fed cuts rates. Market returns usually hover around 12% but rise to 17.4% during times of rate cuts. As the Fed prepares to bail out the groaning economy by perhaps lowering rates again, equity investors can expect to see greater returns in the near future.