Indeed, the Dow Jones is hovering around an all-time high. It is hard to believe that this is just two months after markets plunged on risky lending jitters in late July and early August.

At its September meeting, the Fed delivered the expected cut in rates, but by 50 basis points, more than many analysts expected. It now has lower expectations on inflation for the year. No doubt sky-high oil prices are still of some concern, as the Fed does believe that “some inflation risks remain”.

The Fed has also identified the increased uncertainty around forecasting economic growth with the recent financial market fluctuations as an ongoing issue they will be watching.

Meanwhile average GDP growth in the June 2007 year was 2.1% in the US, well down on the 3.2% recorded in the June 2006 year, but certainly not abysmal. Driving growth at the moment is the exports component, up 7.8% over the June 2006 year. Exports were up across all six major goods categories, and in every service category except transfers under US military sales contracts. Domestic private consumption increased 3.0% on the June 2006 year, while investment spending is down 3.2% after a 0.3% fall in the March 2007 year, a somewhat concerning trend.