Economist loves the rate cut.

When Federal Reserve Board chair man Alan Greenspan announced the half-point cut to interest rates last month, the news was met with the type of "irrational exuberance" he once disdained: a 399-point jump in the Dow and the NASDAQ suddenly finding its sea legs. It was as if, just for a day, it was 1999 all over again.

Now that the hangover has come and gone and the markets are back to mere double-digit daily swings, analysts are patiently awaiting the next move. The cut had been a welcome surprise -- and as much a surprise as it was welcome, coming five weeks before the Fed was scheduled to meet -- but economists, and especially real estate economists, will now watch Mr. Greenspan with the unblinking attention a tree owl gives a fieldmouse. Let the games begin.

"This has been the most pro-active Fed we've ever had," said Bill Shanahan, executive director of financial services for Cushman & Wakefield. "We've gotten a dozen [interest rate] movements in two years. Last year alone we got two cuts out-of-calendar. They're at a point now where, when they see a need, they just do it."

The half-point cut, he added, was larger than anticipated, which in itself was a cause of some concern. Imagine going to bed with a blister and waking up in a hospital: that your quality of care will improve is little comfort as you realize things are worse than they seemed.

And just because the rates on U.S. treasuries are lower that doesn't necessarily mean the cost of doing business will go down everywhere.

"What happened, ultimately, is that lenders sense that the economy is not as strong as it should be," said Shanahan. "Lenders have widened their spreads -- not across the board, but as a generality -- to reduce their risks."

But the cuts can certainly be seen -- as the industry wants to see them -- as a hedge against further layoffs. If businesses can do business cheaper, they can afford to keep their people, and that is very good for real estate people.

"People occupying space is our business," said Shanahan.

In the New York real estate market, it's been some time since lots of people didn't occupy lots of space. While the sub-leasing market has spiked, that merely serves as a good sign of a slowing economy, as bankrupt new economy companies put their spaces up for grabs.

The Fed will meet again towards the end of the month, a good time for this predictably unpredictable board to take further action. At that point, if no more cuts are announced, which isn't impossible, the Fed can do three things to interest rates: lower, raise or hold.

Shanahan said there is no way of predicting what any of those moves will do to consumer confidence. "A big cut will panic people," he offered, " but a small cut would probably just help everyone continue to feel good.

"As for no cut, I'm unsure, but it may also help people keep the faith. But if they cut it again it means they think the economy needs more money in it."

Some have, perhaps recklessly, characterized the market as "recession-proof," although we're seeing that isn't the case. And furthermore, this is by no definition a recession, no matter how much dot-com stock you still own. In fact, the rebound may have already begun.

"A month ago, maybe one story you saw in ten was good news. Now, it's more like two or three," offered Shanahan. "Disney just announced solid earnings, so did G.E. I think we'll see some positive movement [in the economy] in the third and fourth quarters. The real estate industry is still the healthiest it's been in 20 years and there's a boatload of equity out there looking to invest. Whitehall and Starwood Capital have raised billions, and the pension funds are lined up with hundreds of millions of dollars to invest. To them, an eight-percent return looks great compared to the stock market."

So the most important indicator in this new new economy remains consumer confidence. Everyone still has some money, they just won't spend it like they used Ito until they're sure they won't run out.

"Two or three-percent growth is normal: remember in 1992 or '93 Bill Clinton got a standing ovation for achieving that. But when you've been going 95 miles an hour, it feels like you're standing still."