Yesterday August 23, 2007, four major US banks stepped up to the Fed’s Discount Window and each borrowed $500 Million. Analysts believe the Discount Window borrowing by these huge banks was largely symbolic and designed to help calm all the nervousness in the credit and financial markets.

Now, remember that the Fed just cut the Discount Window Rate last week, and many expect them, in turn, to cut the Fed Funds Rate at the upcoming September 18, 2007, Fed Meeting.

Here’s an interesting tie-in…today’s Initial Jobless Claims number showed a little softening in the labor market, and since Fed Chairman Ben Bernanke has been so concerned about a strong labor market leading to wage based inflation, this is another indicator that the Fed will more than likely make a cut to the Fed Funds Rate at that next meeting on September 18th. Keep Reading...