Federal Reserve on the Radar Screen again

Traders sent markets higher early Wednesday in anticipation of the latest Federal Reserve announcement. The majority thinking amongst The Street has been that the Fed will cut the key Interest Rate by another 25 basis points and signal a more assuring economic outlook.

While economic data currently released shows signs of consumer headwinds (latest GDP numbers in the US showed growth of only 0.6%), Investors are hoping for signs from the Fed that it will stop slashing rates after this based on a more certain future for the financial sector and economic credit situation.

Alas, could it be true, that the worst is over for the major financial firms? Well they've collectively written down more billions than Gates and Buffet, so I would certainly hope so. The sticking point is still the consumer in the US. The government has began its program of supplemental financial support (read: giving out cash to stimulate the economy), but will it be enough to stimulate already slowing spending, given the fact that a typical trip to the gas pump costs almost double what it did last year.

While traders seem to be positioning themselves on the Bullish side this morning, it is up to the real Market Makers to set sure this trend can and will continue.