This cut may spawn a mini rally but the long term problems still exist, foreclosures are skyrocketing and I don’t see how this rate cut is going to help people stay in their homes. I also fail to see how this is going to do anything for the lack of credit availability in California because most properties require jumbo loans.
Those with HELOCs may see very slight relief but that doesn’t mean they are going to go out and spend when their home values are going down the toilet.
Bottom line is that consumption is still going to decline and that will spur a recession and there is nothing anyone can do about it. The Fed is not going to lower the interest rate to 1% again.