A weekend rate cut?

Is it possible that the markets are rallying today in anticipation of a fed rate cut over the weekend? The yield curve is certainly telling us one is due and today's job report makes it more likely. So why is a fed rate cut such a good thing? The simple answer is that it reduces borrowing cost. Another interesting thing is that it forcibly steepens the yield curve i.e. 10 yr interest rate > 2 year interest rate > 3 month interest rate. Banks and other lenders really like this since they can now borrow over the short term and lend over the long term thereby locking in the yield differential as profit. An interesting tidbit...the auction rate securities market that failed spectacularly earlier this year intended to allow everyone to borrow over the short term. These securities were then "auctioned" every so often to the lowest bidder. Unfortunately, the liquidity crunch meant no one was willing to buy these and so the interest rates skyrocketed!