Helicopter Ben Isn't Finished Yet

Although the Federal Reserve has shaved its short-term lending target to a wafer-thin 1 percent, the futures market has been aggressively anticipating additional cuts -- and soon.

Fed Chairman Ben S. Bernanke all but confirmed those sentiments today, in a speech he gave in Frankfurt on the occasion of the 10th anniversary of the euro.

Bernanke's theme was increased coordination among central banks, particularly in pouring liquidity into the world's financial system during the credit crunch.

As you know, however, monetary policy actions have not resolved the ongoing strains in financial markets, including interbank funding markets," Bernanke acknowledged.

"The continuing volatility of markets and recent indicators of economic performance confirm that challenges remain," he added later. "For this reason, policymakers will remain in close contact, monitor developments closely, and stand ready to take additional steps should conditions warrant."

Judging by Fed Funds futures, traders believe that another of those "additional steps" will come in the form of another half-percentage point cut at the Fed's next meeting, on Dec. 16.

by Mark Stein