Is the Tail now Wagging the Dog?

And as economists, should we be happy with that?

The recent Fed auction had a clearing rate of 3.95% when the overnight rate was still at 4.5%: http://www.federalreserve.gov/newsevents/press/monetary/20080115a.htm

The Fed comes out this morning (1.22.08) and lowers the overnight rate to 3.5% stating a weakening economy (more likely just trying to stave off the negative bounce from the foreign markets): http://www.federalreserve.gov/newsevents/press/monetary/20080122b.htm

Are those rates coincidental, or is the Fed out-sourcing some rate setting power?

On one hand, as economists we have to side with any use of the market to gleam information. On another, the market is notoriously fueled by behavioral impulses. Though it isn't clear how exactly the Fed decided on the rate, my take is that the Fed shouldn't be taking so many hints from its auctions.