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:

TAMMO GREETFELD, EQUITY STRATEGIST, UNICREDIT MARKETS &

INVESTMENT BANKING, MUNICH:

"The short-term impact from a psychological point of view is a positive one. However the markets should soon refocus on the question of how quickly interest rate cuts as well as the fiscal package will be able to turn the market around and provide a lasting floor for stabilization.

Here, markets were not convinced that this would be possible. That was one of the main features of the last couple of trading days and so most likely the Fed rate cut will only deliver temporary relief.

The equity markets will need a prolonged period of a bottoming phase in order to find a new basis for a new sustained uptrend. That will be a process that will take some time and that is not a done deal by one decision.

Our view was this morning and still is that after this drop there will be short-term trading opportunities in equities but there is no urgency to go overweight equities now as a long bottoming phase is expected and there will be opportunities then."

LAURENT TIGNARD, CHIEF EXECUTIVE OF THE EUROPEAN UNIT OF