When times are tough people don’t borrow money because they don’t want the extra burden. It was proven in the early 1930's people did not borrow because they felt it wouldn’t do them any good. A rate cut needs to be big enough to make it worth it and it needs to be done while there is still confidence in small businesses. 3.75 would work best. The banks are going to have higher spreads because of the chance of default and the chance the rates will go up later. The fed rate needs to be very low for the consumer to benefit.
Stocks will benefit by any rate cut because it will lower their debt but for the regular homeowner or small business the rate needs to be so attractive that we can't resist refinancing and taking a little out for ourselves. It is the regular people that drive the economy if we don’t spend even the biggest companies suffer. "If you want to eat with the kings you need to feed the masses".
It’s you, me, our neighbors, and our families that the big companies work for.