Wall Street floating on high expectations!

After the Friday losses, a badly shaken Wall Street is keeping its hopes up in anticipation of another slash in the rates by the Fed. It seems that these days the market seems to follow a philosophy of 'one day at a time'. The recent dismal showing by the housing market is still setting waves in the industry with more and more banks introducing more and more stringent rules regarding loans. Let us just say that the lending part by the banks is going to become less and less for the near future.
With such a poor showing and a fall by more than 26% in the sales of new homes, the markets reacted with a 'knee jerk' reaction. That is only to be expected.

But would the Fed slash rates this soon and if they do so, what would be the impact on an already weak Dollar? Wouldn't there be a free fall? As it is the Dollar has lost so much of its value against a host of major currencies and today it holds supreme only over those currencies whose rates are still stringently controlled by their central banks. My two bits is that the Fed would slash the rates but it may not come as early as the wall street thinks. It would probably happen around the end of the fiscal year, thereby giving the new Financial year a boost as well. But then again, it may happen soon, either way, it is time for a martini, dry, shaken but not stirred!