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Since tomorrow's monetary policy meeting has so much riding on it, I decided to put together a quick preview of what is expected and explain what the Federal Reserve's decision truly is.

What's at stake in this monetary policy meeting? That all depends on who you speak to obviously, but its quite obvious that the stakes are very high. Some believe that this interest rate decision will be the deciding point of whether the economy slides into a deep recession or not. Others believe that if the FOMC continues to move aggressively inflation will quickly become a major problem.

At this point the market is expecting big things from the Federal Reserve. All of the economic data that points to weakness, and the huge pullback in stocks over the last few weeks has led investors as well as many economists to believe that the Fed must continue to move aggressively to forestall a recession. In fact, the fed funds futures data is showing an 88% of an additional 50 basis point cut and a 59% chance of another 75 basis point cut tomorrow. These expectations are very high, so high that I believe the market could be setting itself up for a letdown unless the Fed moves at least 50 basis points and strongly hints at continued cuts in the coming months. Because the Fed moved so aggressively just last week, I find it very hard to believe they would move 75 basis points again, and I think they'll be some hard debating whether they should move 25 or 50 basis points. In the end, 50 basis points is liable to win out, but there will be some intense debate.

The real choice here for the Federal Reserve is whether they want to throw another huge rate cut to the economy to help the housing market and the mortgage mess, or if they believe they should take more of a wait and see attitude and gauge inflation. I believe that the Fed should err on the side of being aggressive since the most clear threat to the economy right now is undeniably recession.

One thing is for sure, no matter what the Fed decides to do tomorrow, there will be plenty of people who believe it was the wrong move.