Congratulations, Ben, you've shown some courage under fire. Yes, the financial situation is distressing and the economy is weak, but inflation is clearly a problem and the dollar needs help. You've got your eye on all these problems. Relative to what the markets were expecting, you gave more weight to inflation and the dollar than to the economy. This is a real break from your past behavior and one that I think is very encouraging.
The Fed can (and did this morning) inject funds into the banking system at any time to relieve liquidity shortages. They don't need to make money cheaper in order to do this.
The market may be disappointed by this lack of Fed action, but this could be one of those many times when the market's knee jerk reaction is the wrong one from a long-term perspective. I bet the market will come back to its senses and eventually applaud this (lack of) move.