Business Beat

Irwin Kellner, chief economist for North Fork Bancorporation and MarketWatch.com, said he welcomed the move by the Fed this morning.

"Given the developments in overseas markets, especially yesterday (Monday) when U.S. markets were closed, it was becoming increasingly apparently that the only way to stave off a decline in U.S. markets was for some dramatic action but the Fed. It looks like we got that."

Kellner said that he expects further interest rate reductions by the Fed later this year.

Additionally, Kellner said, investors may also be soothed by comments from Treasury Secretary Henry Paulson, who said he believed Republicans and Democrats in Congress would be able to agree to some type of economic stimulus plan, which was advocated last week
by President Bush.

Kellner said that the Fed action and a stimulus plan would be "helpful," but said that the economic problems are primarily the result of an over-supply of housing in the U.S., and that homes prices must still fall further before banks will begin to lend again.

Kellner said that given the Fed's action, U.S. markets should be calmer today than they would have been otherwise.

"It would appear that the worst is over this time around," Kellner said. "But that doesn't mean there won't be a next time."

--Jim Bernstein