by Calculated Risk on 1/04/2008 05:27:00 PM

Click on graph for larger image.

Source: Cleveland Fed, Fed Funds Rate Predictions

The market expectations are now for a 50 bps rate cut on January 30th.

Meanwhile, the Fed has expanded the Term Auction Facility (TAF) in January:

The Federal Reserve will conduct two auctions of 28-day credit through its Term Auction Facility (TAF) in January. It will offer $30 billion in the auction to be held on Monday, January 14 and $30 billion in the auction to be held on Monday, January 28.
...
The Federal Reserve intends to conduct biweekly TAF auctions for as long as necessary to address elevated pressures in short-term funding markets. Decisions regarding auctions in February will be announced by Friday, February 1.