Undoubtedly concluding that the national economy is in, or near, a recession the Federal Reserve has cut the overnight lending rate to 3.5%, a 75 basis point reduction:

“Broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households,'' the Fed said in a statement in Washington. The FOMC took the action “in view of a weakening of the economic outlook and increasing downside risks to growth.''

In English that means that troubles in the banking sector is leading them to constrict lending which is slowing economic growth.

“Appreciable downside risks to growth remain,'' the Fed statement said. “The Committee will continue to assess the effects of financial and other developments on economic prospects and will act in a timely manner as needed to address those risks.''

This means the Fed is ready to continue to act. Now what does this mean to Maui real estate? t should, over time, lead to lower mortgage rates and a more vibrant economy. But it won't happen immediately.