Falling house prices, tighter credit and rising prices are going to hurt consumers.

The U.S. Federal Reserve reduced the benchmark U.S. lending rate by a quarter point – from 2.25% to 2% – yesterday (Wednesday), and then hinted that it will take a break from one of its most-aggressive rate-cutting campaigns in decades.

Merrill Lynch & Co. (MER) ripped the Band-Aid off its investors today (Thursday), when it posted its third consecutive quarterly loss and announced 3,000 job-cuts in its first-quarter earnings statement.