Greedy Street gets drawn up short

Wall Street dropped like a rock today after the Federal Reserve only cut the prime rate (and discount rate) a quarter-percent rather than a half-percent.

The Street turned on a 240-point dime, falling from 40 points up to 200 points down after the announcement. Apparently, the Street is greedy for anything that will liquidize, or re-inflate, or even re-bubble, the credit market, ignoring that oil prices are likely to at least stay somewhere in the $85-90/bbl range, that the European Central Bank, while not raising rates, refused to cut them last week, and that European inflation concerns may constrain the U.S. from doing much more.

Of course, the Fed may make another quarter-point cut later; Fed Governor Eric Rosengren wanted a half-percent cut today.

That said, since it was just a quarter-point cut, and the ECB dog didn’t bark last week, the dollar probably won’t slump too much lower.