This post is going to be a little different from the norm as A) There is no video clip and B) I usually will not post twice in a week; however this is a necessary exception. Here is the text released by the Federal Reserve regarding the rate cut earlier this week, as reported by the Associated Press:

The Federal Reserve’s interest rate statement released Tuesday: The Federal Open Market Committee has decided to lower its target for the federal funds rate 75 basis points to 3-1/2 percent. The Committee took this action in view of a weakening of the economic outlook and increasing downside risks to growth.

While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households. Moreover, incoming information indicates a deepening of the housing contraction as well as some softening in labor markets.

The Committee expects inflation to moderate in coming quarters, but it will be necessary to continue to monitor inflation developments carefully. Appreciable downside risks to growth remain. The Committee will continue to assess the effects of financial and other developments on economic prospects and will act in a timely manner as needed to address those risks.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Charles L. Evans; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Eric S. Rosengren; and Kevin M. Warsh. Voting against was William Poole, who did not believe that current conditions justified policy action before the regularly scheduled, meeting next week. Absent and not voting was Frederic S. Mishkin. In a related action, the Board of Governors approved a 75-basis-point decrease in the discount rate to 4 percent.

In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Chicago and Minneapolis.

I am not a financial wizard, and Dr. Bernanke has forgotten more about financial markets than most of us will ever know. However, the actions of the Federal Reserve Board lead to one question that, so far, no one has answered — What is the message that the Board wants to communicate?  If it was to re-assure the markets it did not work, and there is nothing in the statement to drive anyone toward re-assurance.

Dr. Bernanke has allowed everyone to play a guessing game as to the Board’s motives, which has led to what appears to be an undermining of the obvious purpose, which would be to calm the markets. This was the largest rate reduction in nearly 25 years, and happened outside of the confines of a regularly scheduled meeting — PS - there is a meeting scheduled last week. So what could have been done differently?

The Board is made up of brilliant individuals.  There must be reasons why the cut had to happen yesterday, why the Fed did not wait, and what the Fed thinks. None of those questions are answered in the press release above.  Where was the public press conference? Where was the re-assuring voice, the leadership, when the market needed it most?  Where was the media tour yesterday not only defending the cut but explaining it? Where were the surrogate messengers? What was the one clearly defined message? What was the justification of why the cut had to happen yesterday, and who was doing the justifying for you?

This is a perfect example why a messaging and communications strategy is essential for every business, whether your sales are $1 million or $100 billion. There is only one thing worse than delivering no information, and that is delivering mixed or conflicting information. It is imperative to spend as much time planning how you are going to communicate a decision as you do making the decision.