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The Federal Reserve delivered the expected cut in interest rates of 1/2% on Wednesday. After the announcement, markets were stable for the most part and then rose sharply on Friday. Wall Street wanted the cuts, and they were delivered. some underlying numbers suggest inflation is still showing a strong pulse, and the beast is not yet dead. This is particularly true in areas like services rather than goods. Also, recent inflation numbers have been helped by soft energy prices and deflationary forces coming from China. That may seem like a good thing, but if prices fall because of a drop in demand in China and elsewhere, they fall for the wrong reasons.  Deflationary forces are more difficult for the Fed to battle than inflationary forces. Cutting interest rates before inflation has been tamed suggests the FED is now more concerned about weakness in the labor market and the possibility of a recession. Investors might interpret this as the FED being weak on inflation because continued money printing is necessary to fund the federal government’s excessive spending. Their timing could also be interpreted as political. With the election so close, why not delay for just 40-odd days until after the election to avoid the appearance of the Fed intervening in the election process? Or have they been compromised along with almost every other Federal agency? The Fed is supposed to be non-political, but the cut came just after a group of Democratic senators called on the Fed to lower rates.