• Fed has moved in an aggressive and timely fashion
• Emergency Rate Cut was to address fear on economy
• Spreads represent caution by banks on liquidity
• Sees disruptions in commercial real estate lending
• Market tensions have lessened however there is still tension in the money markets
• Slow growth is more probable than recession
• Fed must be focused on downside economic risk
• Fed must not be afraid to act due to moral hazard
• Increase in credit spreads have worked counter to the Fed's cuts

ANALYSIS: Ms. Yellen is not a voting member but is behind Bernanke.  Her comments are pragmatic and seem to be more defensive about the economy.  She realizes the credit crunch which is still prevalent in the market, is neutralizing the Fed cuts. This suggests that there is room for more cuts. 

Bernanke speaks on Thursday.  The market, although interested in what Fed governor's have to say, is more interested in the words of Bernanke and Vice Chair Kohn.  The Fed members on the FOMC seem to realize that given the economic circumstancesa nd risk,  being united behind the chairman are more important then having an independent voice.  I think all would agree that there are real risks to inflation.  However, there is bigger risk due to seizing of credit/housing/banking markets.  Now is not the time to stand up and be heard, but to listen. 

So Thursday the market will listen.