1) The Fed is not as independent as central banks in other countries are. Greg Mankiw may not like it, but the fact is that both Congress and the Whitehouse actively seek to influence monetary policy in the United States. ...

2) The Fed is mandated to keep both inflation and unemployment low. By comparison, the other major central banks are only required to focus on inflation. When they do look at unemployment, it plays lexicographic second fiddle to keeping inflation in check. At the Fed, they are compelled to take unemployment into account at the same time as looking at inflation.

3) The banking and finance system is central to the real economy. Without a ready supply of credit to worthy and profitable ventures, economic growth would slow dramatically, if not cease altogether. Although it creates a clear moral hazard when bankers’ pay is not aligned with real economic outcomes, this - combined with the first two points - implies that the so-called “Bernanke put” is probably, to some extent, real.

4) The latest GDP numbers and IMF forecasts were released in between the two rate cuts. I have nothing to back this up, but I wouldn’t be the least bit surprised to discover that the Fed gets (or got) a preview of those numbers. Seeing that markets were already tanking, knowing that the reports would send them tumbling further, perhaps believing that they might already be in a recession, almost certainly fearing that the negative news, if released before the Fed had acted, might send risk premia skywards again and recognising that what they needed was a massive cut of at least 100bp, perhaps the Fed concluded that the best policy was to split the cut over two meeting, making a smaller but still unusually large cut before the reports were released to ensure that they didn’t trigger more credit-crunchiness and a second one after in notional “response.”

One of the issues is the political nature of the Fed. Reserve banks were depoliticised as it was realised that many of the bad economic policies were political in origin, "ie it is the economy stupid". Zimbabwe is the current poster child for bad political economic policies. The political nature of the US fed ties it to political outcomes and leads to inferior economic decisions.