The Fed's cut interest rates; now what?

The long awaited news finally arrived a few days ago, The Federal Reserve cut the discount rate by 1/2 percent. Now what? Or maybe a better question is, so what? Wall Street was looking for this and had factored it into their trading, but the fact of the matter is, when the Fed's cut interest rates, it does not always translate into lower mortgage rates. This is one of the biggest misunderstandings there is.
The action that was taken by the Fed's, lowers the interest rates for member banks that borrow from the Federal Reserve. It adds liquidity to the system but there is no guarantee that it will lower mortgage rates. At best consumers with equity line second mortgages may see slightly lower rates if banks lower the prime rate which is what most equity lines are ties to.

So what happened when rates dropped a few days ago? Mortgage rates actually increased due to a fear that the rate cut would reawaken concerns of inflation. I wish I could explain that to you, but I can't.