Its editors write:
Futures markets are already pricing in further rate cuts deep into 2008. This is hardly a vote of confidence in the Fed, and our advice would be that if Mr. Bernanke wants to cut further he do so fast and be done with it. This would shift market expectations that still-lower borrowing costs aren’t coming, and would itself help to revive lending.
Above all, Mr. Bernanke needs to be clear with everyone — Congress, Wall Street, investors — that easier money is not some magic elixir for the underlying problem of bank insolvency.
All of their comments about Bernanke strike me as judicious and wise, as they have since this round of panicky rate cuts started.