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It looks as though Ben Bernanke of the Federal Reserve has decided to drop interest rates (again) at the end of the month.

Fed vows ‘substantive’ action to avoid recession – By Barrie McKenna, The Globe & Mail

The Fed is “prepared to act in a decisive and timely manner … to counter any adverse dynamics that might threaten economic or financial stability,” said Mr. Bernanke, who has been criticized for not moving fast enough to deal with the stumbling economy.

The remarks, delivered in a speech in Washington, set off a lively debate among analysts about what Mr. Bernanke meant by “substantive.”

… many economists, along with traders in federal funds futures, now expect another half-a-percentage-point interest rate cut on or before the central’s bank’s next meeting Jan. 29-30, and more rate relief in the coming months.

“This speech [is a] a tacit endorsement of the market’s expectations of a more aggressive move on January 30th,” said Bear Stearns economist John Ryding.

The dance so far has been to avert a recession while not encouraging rampant inflation.

Apparently, the Fed chief is more concerned about the threat of a recession than inflation.

What would most Americans prefer? That’s easy – cut rates, because their credit card rates go down.

What’s better for most Americans? A recession, bringing things back to normal.

Superstar real estate agent and Urban Digs blogger Noah Rosenblatt talked about it at this week’s Inman News Conference.

“There are a lot of tentacles in this credit crisis,” and the fallout has the potential to reach pension plans and other financial sectors, said Noah Rosenblatt, founder of the blog and a real estate agent for Halstead.

“We know we had a debt problem. Stupid things were going on. Wall Street took advantage of it like they always do. It’s a demon and we’re paying the price for it. It’s going to make the housing recession worse,” Rosenblatt said.

But a recession also presents an opportunity, he said, and a chance to correct a market that had moved so fast for so long. It definitely is going to take time, he said, as the prolonged period of lax lending standards will not be mended in the short term.

“This is a necessary but good thing for us to go through. We should go through this and accept it. This has to happen,” he said. “We need this downturn.”

True, that.

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