The Federal Reserve's decision Wednesday to drop the short-term lending rate again, to 2 percent, is unlikely to stem the tide of recession and it carries problems of its own.

The Fed left hanging the question of whether it had further cuts in mind, but this was the seventh reduction since September, intended to loosen the credit squeeze in the financial market. The quarter-point cut, a drop of 11 percent, doesn't leave too far to go to zero.

The repeated rate cuts are starting to look like desperation on the part of a Fed with little or no idea what to do next. President Bush heightened the general impression of economic cluelessness at the top in a press conference at which he said that the United States was in "very difficult times, very difficult."

He sounded like President Herbert Hoover in the face of the Great Depression, continuing to insist on economic policies that had already failed. He tried again one of his favorite ploys, claiming that it was Congress' fault that the nation's economic problems weren't solved, as opposed to their being the natural result of two terms of his policies that have resulted in aggressive deficits, a mortgage crisis and weak employment.

Perhaps the worst of the latest interest cut is that it could end up being inflationary. Inflation reflects the rise in the basic cost of living of Americans, something they see readily happening on energy and food, while wages and salaries are not keeping pace. The International Monetary Fund estimates that inflation this year will be the highest since 1995. Inflation hits the less fortunate -- as opposed to Mr. Bush's political base -- hardest.

Since the U.S. economy is the largest in the world, Europe and most of the rest of the developed globe are likely to go deeper into the tank with America. Countries whose currency is pegged to the dollar are facing the dilemma of following the United States as the Fed tries to cope with the slide, or cutting their currencies loose from the dollar, creating another serious problem for the United States. Some Chinese exporters are already asking to be paid in euros, not dollars.

This is not good, and it will not be fixed easily even by a new post-Bush administration pursuing different policies.