0.5%

The Fed cuts rates again, this time by one-half percentage point.

The Federal Open Market Committee voted 9-1 to lower the federal funds rate at which banks lend to each other to 3% from 3.5%. The funds rate stood at 5.25% as recently as September. The Fed also lowered the discount rate it charges banks that borrow directly from it by a half point to 3.5%.

Dallas Fed President Richard Fisher dissented, preferring no rate change. It was the fourth-straight meeting with a dissent, each time from a different voting regional Fed president. The Washington-based Board of Governors has voted in line from the start of the cycle.

Just eight days ago, the Fed cut the key lending rate by three-quarters of a point. For those keeping track, that's a point and a quarter in less than two weeks.

And it is worth noting that the Fed has been in a rate-cutting pattern for a while now.

In October, in response to the accelerating crisis from the mortgage-backed securities meltdown, the central bank cut rates and warned Wall Street not to expect more of the same.

The move, to reduce short-term rates by one-quarter of a percentage point, to 4.5 percent, was aimed at preventing the disruptions in mortgages from crippling the rest of the economy. But the vote was not unanimous, reflecting disagreement among policy makers.

In a statement accompanying its decision, the central bank warned that “some inflation risks remain” and played down risks of a possible recession. “The upside risks to inflation roughly balance the downside risks to growth,” it continued.

Three months later, the good results some observers expected from that rate cut have failed to materialize. Meanwhile, the bad results it was inteded to avert, have come to pass. We stand on the precipice of a recession. The mortgage-backed securities crisis has become a genuine crisis of confidence in market stability.

I suppose the Fed can continue to cut rates to zero in an effort to prop up Wall Street, but should that really be the goal of the central bank?

Salon's Andrew Leonard wrote contemptuously after the previous rate cut that Fed Chairman Ben Bernanke seemed interested in doing little more than juicing the stock market:

Ben Bernanke has proven, once and for all, that juicing the stock market is now considered Job #1 for the Federal Reserve Bank. The material effects of rate cuts do not show up in economic growth statistics for months or even years after their enactment. By making an emergency "inter-meeting" cut a mere eight days before its regularly scheduled meeting, Bernanke is conducting economic policy in order to appease market psychology. The fragile psyches of Wall Street traders who played such a pivotal role in creating this mess by romping through the derivatives wonderland, are now in control of government strategy. That can't be good.

And let's say the Fed does continue to simply cut rates in response to this economic crisis. What happens when you get to zero and it still hasn't worked?

I honestly don't know the answer, but this plan does not seem to be yielding any long-term results.