Mr Market will think of little else today other than the possibility of a one percentage point rate cut by the Fed, which would leave the Fed funds rate at to 2%.

According to Dow Jones MarketWatch, “the Fed funds futures contract, which on Friday were implying a 75 basis point cut, have now fully priced in a full one point cut after the Bear Stearns troubles and are showing a slight possibility of a cut to 1.75%.

Stocks continued their slide today despite the Fed’s best efforts to keep the Street happy.

Major indexes opened sharply lower Monday, seesawed early in the session, then sank into negative territory again in the afternoon. The Dow Jones Industrial Average recently traded 44.21 points down, off 0.4%, at 11906.88.

The US is on full recession alert after firms made their deepest staff cuts in almost five years in February.

The net loss of 63,000 jobs last month is widely expected to to influence the Fed’s thinking on further rate cuts to ’stimulate’ the US economy.

“Double-digit inflation is on the way, says Marc Lichtefeld. “At least according to John Roque of Natexis Bleichroeder.”

Fed boss Ben Bernanke will destroy the US dollar ”by cutting interest rates” according to investor Marc Faber said.

“Bernanke’s reduction in the target rate for overnight loans between banks to 3% has spurred a rout in US stocks and gains in oil and gold prices,” said Faber, the Gloom, Boom & Doom report publisher who told investors to buy gold at the start of its six-year rally.

The US dollar neared new lows against the euro. The US currencies woes were exacerbated by a private-sector report showing that US firms unexpectedly shed workers last month.According to the Bloomberg news agency: “The dollar weakened to $1.5232 per euro at 9:01 a.m. in New York, from $1.5217 yesterday.”

Meanwhile, sterling fell to a record low against the euro as a UK industry report reveled fall in British consumer confidence.

“The verdict is in,” says Britain’s Daily Telegraph. “The Fed’s emergency rate cuts in January have failed to halt the downward spiral towards a full-blown debt deflation.”

Oil prices broke the $103-a-barrel for the first time today as the dollar hit new lows against the euro and the yen.

The dollar hit record lows against the euro, Swiss franc and a basket of major currencies on today, reports Reuters.

The greenback has been hammered by increasing concerns that US economy is in recession along with Wall Street’s belief that the Fed will further slash interest rate cuts.

Ben Bernanke didn’t exactly tell Congress what the Fed would do next, but he dropped heavy enough hints to assure Mr Market that more rate cuts are coming.

According to CNN, “futures listed on the Chicago Board of Trade indicate that investors are pricing in a 100% chance of a half-point cut and a 32% chance that the Fed will slash interest rates by three-quarters of a percentage point.

Ruetes reports that Federal Reserve Chairman Ben Bernanke has signaled a readiness to cut interest rates again to prevent further damage to the weak U.S. economy, even as he took note of rising inflation risks.