BEST PRACTICES :: Fed Cuts Rates, Small Business Holds Its Breath

The Federal Reserve on Tuesday slashed its key interest rate to a three-year low and signaled more reductions are likely, unloading heavy artillery in its effort to keep the credit crunch from triggering a prolonged recession.

The three-quarter-percentage-point rate cut, though extremely aggressive by any historical measure, was still seen as a pulled punch by Wall Street analysts who believe it will take a full percentage point cut. This is another sign of the severity of a situation that has already claimed Bear Stearns and forced Fed officials to use Depression-era tools.

In the wake of the Fed's decision, Wall Street brokers are cheering and small business holds its collective breath. The move’s consequence for small business owners is still unclear.

Asked about the possibility of a recession, Ben Bernanke, Fed Chairman, sidestepped the question. “You really cannot make a determination,” he said with a sly grin, “until well after the event.”

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