One market I haven't looked at for several months is the Eurodollar market (that is, where 3month Libor resets will be). Check out this chart for the Sep '08 contract:
Sep '08 Eurodollar
You can see that even back in the midst of the crunch in August, the market was only pricing about 4.50% on 3month LIBOR by Sep '08, perhaps believing the crunch would be short-lived. 4.50% would indicate the market thought the FED would be at 4.50% and in cutting mode, or 4.25% and basically done cutting. Or something along those lines.
Today, the market is pricing in 3mLIBOR for Sep '08 at about 3.18%, so for the Fed to be at about 3% by then. Doesn't seem unreasonable, but I think there is some risk the market has got ahead of itself, and if the Fed disappoints at the next meeting and only does 25, and markets can get some sort of a recovery going, I think we could see this react lower by 25-50bps or so. So I just sold $100/basis point (bp) at 96.815.
For those not familiar with these interest rate markets, all I can say is that they are awesome for trading, as the go through such huge swings in sentiment, sometimes very irrationally if you ask me.