Check the latest newscast and it looks like the rest of the world’s financial markets are at least spooked by the prospect that it may happen. Yet, Ben Bernanke and his colleagues at the Federal Open Market Committee won’t say it (not in their official statements at least). Maybe they save it for so much office water cooler gossip, or behind closed door discussion with “W” at the White House.

Still, the Fed refuses to give into the concept that we are very likely headed for a dive into a RECESSION!!!

In a move that has not been seen in decades, the FOMC on Monday decided to make a rate cut ahead of its regularly scheduled meeting, taking the federal funds rate down 75 basis points to 3.5 percent. And the committee may follow it up with another rate cut next week during its regular meeting as well.

The FFR is the short term interest rate banks charge each other overnight to borrow money. These cuts could end up impacting consumers in the wallet in the form of lower mortgage rates (the upside), as well as higher credit cards rates, and lower interest rates on savings accounts (some of the downsides).

The question is: is this latest cut, which wasn’t expected by most people until the FOMC’s next meeting, more of a way to stem the severe bear market trends on Wall Street? Or was it more of a reaction to the fact that many financial experts don’t believe Mr. Bush’s $145 billion economic stimulus package announced a few days ago will do anything to pull us up by our bootstraps — allowing the Fed to save face while not admitting that a recession is almost here (if not here already by some accounts)?

In its statement the Fed admits that the housing “contraction” is deepening and labor markets are softening. If last month’s employment numbers are any indication, along with companies like Yahoo! announcing its plans to lay off hundreds of employees in the near future, we are getting dangerously close to compiling all of the factors that led to the recession of the early 1990s. High foreclosures, job losses, an upward trend in bankruptcy filings. The only factor from that time we haven’t seen is high interest rates — at least not yet anyway.

We’ll have to wait until next week to see if any of the economic stimulus proposals are really going to help homeowners either in foreclosure or on the cusp of going into foreclosure. In the meantime, hold onto your hats. We’re in for a bumpy ride!