The Fed’s current policy of anticipatory and preemptive rate cuts will lead to unsustainably high asset prices, increased financial instability and further widening of the wealth gap.The fed is clearly going for broke here and do whatever is necessary to keep the bubble going. This will be the first cut since 2007 September, and we all know how that turned out as December of 2007 ignited a stock market selloff by wiping out 60% of the index. Most likely, a quarter point is in store tonight followed by another half percent before year-end. As long as the Fed doesn’t perceive that inflationary pressure is getting out of control, the policy makers are prepared to do anything to keep this bubble from popping. If the Fed continues down this path, we will find out that the Fed’s cure for avoiding a near-term recession and negative interest rates may ultimately make things worse.