Reacting to market panic with panicky rate cuts is likely to make things worse rather than better.

ECONOMIST: The markets

The meeting came a day after Asian, European and US markets continued to panic sell despite rate cuts and cash injections by central banks, amid widespread fears of a global recession.

BBC: IMF in global 'meltdown' warning

The panic is occurring amidst a galloping rate of change in global business that seems to favor rising nations more than mature nations.

FORBES: Boomers Make The Fear Worse

In fact, the Fed was established as a result of the Panic of 1907 and the discount mechanism and rate were the only tools of monetary policy given to the Fed in the Federal Reserve Act.

FORBES: What The Discount Rate Hike Is Really About

The panic has sent long-term rates tumbling again: The rate on 30-year conforming loans is down to 5.07%, according to Bankrate.

WSJ: Eight Things the Plunge Means for Your Money

Certainly, European markets have reached for their handkerchiefs this past few days, though opinions seem divided about whether the Fed rate cut in the U.S. was a smart move or a sign of panic.

NPR: European Markets Lose Ground

The willingness of investors to pin their hopes on a rate cut is understandable: after all, that has been the response of the Fed to every financial panic since the stockmarket crash of 1987.

ECONOMIST: Monetary policy