In brief: FOMC deliver second 25bp.....>

US TSY FLOWS: In brief: FOMC deliver second 25bp rate cut in as many Fed policy

meetings, "Hawkish" cut saw front end rates and equities sell-off (Late program

buying in equities buoyed stocks, particularly bank shares). Fed chair gave no

quarter to all those suggesting asset purchases would be anncd today, though as

he suggested, we'll probably figure out over the next 6 weeks whether they

should have gone further in taking action on the funding situation. Took great

pains to disassociate this week's problems with real economic impact / monpol.

- Eurodollar futures see Big reversal in short end as prospect for further cuts

into year end diminish EDZ9 w/8.0 bps range. Indicative of latest funding

pressure, swap spds hammered, 2Y spd makes new inverted low of -4.06. 

- N.Y. FED TO CONDUCT REPO OPERATIONS FROM 8:15-8:30AM THU -- "in order to help

maintain the federal funds rate within the target range of 1-3/4 to 2%...for up

to an aggregate amount of $75B." Like today's operation, Thursday's likely to be

oversubscribed (and more aggressively).

- The 2-Yr yield is up 3.1bps at 1.7559%, 5-Yr is up 1.5bps at 1.6728%, 10-Yr is

down 0.7bps at 1.7944%, and 30-Yr is down 2.4bps at 2.2442%.