Financial market functioning improved after the decision was announced, an outcome that partially allayed the risks of a coming credit crunch and thus suggested that macroeconomic risk may have been reduced. Still, conditions in several markets remained strained. In part, those tensions certainly reflected the fact that valuation risk was still substantial and would not be reduced quickly.
Indeed, the process of price discovery is ongoing, and it will likely be some time before it is completed. At the FOMC meeting last week, the federal funds rate target was lowered by another 25 basis points.