"Well, so much for inflation fears. And a good thing, too," Matt Cooper wrote on his Portfolio blog this morning, after the Federal Reserve, faced with a global stock sell-off ignited by fear of a recession, cut the federal-funds rate three-quarters of a percentage point, the biggest single cut in interest rates, according to The Wall Street Journal, since 1982. Cooper sounded a little like he had just woken up. "The rate cut was needed and the dribbling of half and quarter point cuts," he wrote. Treasury Secretary Henry Paulson, who had been leading a press conference on the hale state of the U.S. economy when the news came in, was also pleased. "This is very constructive, and I think it shows this country and the rest of the world that our central bank is nimble and can move quickly in response to market conditions," he said. Others were more skeptical.

"We can’t use the word PANIC," Financial Times Alphaville blogger, Paul Murphy, said in a live chat with co-worker Neil Hume. "Why?" Hume asked. "Cos everyone else is using it."

Well, some people were just instilling it. "I gotta tell you, a three-quarters-of-a-point cut is a stunning change," former Fed board member Rick Hartnack told a crowd at a Business Journal event in Minneapolis. "If it sounds too good to be true, it probably is. Government stimulation is always too much, too late, and usually leads to inflation."

Commenters on The Wall Street Journal's Website had the same concern. "$10 milk, here we come!!!" said one.

Eyebrows also were raised across the pond, where it was five hours later and people were perhaps more alert. "It is bad news when the markets panic. It is worse news when one of the world's key monetary policy making institutions panics," economist Willem Buiter wrote on the Financial Times' Website, in a piece titled, "The Bernanke Put: Buttock-Clenching Monetary Policy Making at the Fed." According to Buiter, a professor at the London School of Economics, the Fed's reaction to the market's problems was excessive and potentially destabilizing. "It would have been far preferable, particularly because the stock market decline is a global phenomenon, to have a coordinated modest rate cut of, say, 25 basis points, by all leading central banks at some later date, when this would not look like a collective knee-jerk response to a fall in global equity prices.… With this irresponsible act, the Fed has just become part of the problem."

In Davos, for the World Economic Forum, the New York Times' Floyd Norris agreed. "What this move shows is that the Fed is reacting, not leading," he wrote on a post on his blog titled, "Panic in Washington."

But don't panic just yet: Many continue to hope that the Fed's efforts, combined with a stimulus plan from the government, could at the very least make this "a much milder recession than it otherwise might have been," Nariman Behravesh, chief economist at Global Insight, in Massachusetts, told the Guardian. So we may be in a recession, but it's a kinder, gentler recession.