INSTANT VIEW - Fed cuts target rate in surprise move by 75 bps

NEW YORK (Reuters) - The U.S. Federal Reserve on Tuesday slashed the benchmark federal funds target rate by 75 basis points to 3.5 percent in a surprise intermeeting decision.

COMMENTS:

NIGEL MYER, FINANCIAL CREDIT ANALYST AT DRESDNER KLEINWORT IN LONDON:

"There is a risk that since Bush wants to put $150 billion into the economy and the Fed cuts rates by 75 basis points, that the market reaction can be, 'If they are panicking, then maybe we should."

"We don't think it will get us out of the mortgage mess. It won't solve the monoline problem."

NEIL PARKER, MARKET STRATEGIST, ROYAL BANK OF SCOTLAND, LONDON:

"Given that we were a week away from the Fed's meeting, it smacks of panic by the Federal Reserve."

"There is no way that they needed to cut 75 basis points if they were going to do a 75-basis point rate cut on Jan 29 and 30."

"Rather than instilling confidence into the markets I think it will just throw in more panic, so we'll get a short-term really, followed by most of the equity markets are going to get an absolute hosing again."