The Federal Reserve building in Washington, D.C.
The Federal Reserve building in Washington, D.C. - 
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Stacey Vanek-Smith: Today a surprise move by the Federal Reserve and central banks all over the world. A coordinated interest rate cut. From New York, Jeremy Hobson explains.

Jeremy Hobson: The coordinated move cut rates by a half a point in England, Europe, and Canada. And here in the U.S., The Federal Funds rate drops to 1.5 percent. It's been at 2 percent since April. But today, tangible fears of a global economic slowdown have trumped fears of inflation.

Gary Shilling: Central banks don't know what else to do.

Gary Shilling is President of an economic consulting and investment advice firm. He calls this Phase 4 of the economic slowdown -- the globalization of the recession. He calls the Fed's move symbolic and says central banks have now exhausted most of the tricks in their bags.

Shillng: This is a classic liquidity trap. The Fed is pushing on the string. The banks simply do not want to lend to each other, much less anybody else. And the central banks are really impotent.

Still, some Fed watchers are predicting yet another rate cut by the time the Fed meets later this month.

In New York, I'm Jeremy Hobson for Marketplace.

Follow Jeremy Hobson at @jeremyhobson