It is virtually certain that Dr. Bernanke and his jolly band of Governors will vote to lower the Fed Funds rate next Tuesday. Of course we all know that the crybabies on Wall Street have been begging for such a move for weeks now. But that's not why the Fed feels it must make the move. Dr. Bernanke has made it clear that it is not the Fed's job to rescue wealthy investors who made risky bets on the housing market and other financial products, but he will step forward if the general economy is affected.

One would think that the pathetic jobs report released last week was all the evidence he needs to lower rates and not appear to be the lapdog of the Wall Street crybabies. But several of his Fed Governors apparently don't think so. They seem to believe the economy will weather the ravages of the housing slump, the credit crunch, the slow-down in auto sales, the inability of consumers to tap home equity loans, and the debilitating affect of high oil prices. This view doesn't surprise me. The Fed is loath to lower interest rates because it may further decrease the value of the dollar and foster inflation.

I have said on numerous occasions that the Fed always waits to lower rates until it is too late to avoid a recession. So the question is whether the economy is headed for a recession even if the Fed does lower rates next Tuesday. Treasury Secretary Henry Paulson doesn't think so. He believes the U.S. economy is strong enough to overcome all of the problems cited above. He's a pretty smart guy. But is he telling us the truth? Either way, Dr. Bernanke still has a chance of maneuvering the economy to a soft landing, but he must be bold.

If the Fed cuts rates 50 basis points on Tuesday, stock prices will rally sharply, like they did in 1998, Dr. Bernanke will have won the day and improved his chances of avoiding a recession. If he lowers rates only 25 basis points, investors will be disappointed, and stock prices will move lower. If for some reason the Fed decides not to lower rates, stock prices will fall sharply, the economy will be jeopardized and this Bull market is over. Mark Tuesday, September 18, 2007 on your calendar. It will be A Crucial Day of Decision.