I think this is an important first step for the central bank. They didn't want to lower rates too aggressively for fear of sending a signal to the markets that they thought things were completely falling apart.
Reading through the housing tea leaves suggests that the housing boom is becoming a bit long in the tooth. And while this outcome does not necessarily signal a collapse in activity just around the corner, it does suggest that the housing sector's best days are probably behind us.
In other words, before the end of 2002, the Fed should signal that their upward rate moves were just a warm-up for what we can expect in 2003.