Rate cuts do traditionally jump-start the market. This much is true. But you must consider the overall economic environment, because again, the stock market isn't that simple. And consider that in Japan, interest rates are close to zero while the economy continues to teeter on the brink of recession. The U.S. stock market is overpriced and our economy is headed for a tailspin.
Money is a bit cheaper than it was a couple months ago.
Even if a rate cut helps stimulate spending over the short term, the longer term effect will only contribute to the underlying erosion of our economy, and a downturn more severe and more prolonged than it need be. A rate cut at this point in the game serves only to inspire consumers to go even further into debt. Yes, we may see more consumer spending. But that spending will be due to an increase in debt. Consumers will spend more while their personal balance sheets will go from the critical care unit back into the emergency room.