NEW YORK (CNN/Money) - Is Alan Greenspan Santa's little helper?

The Federal Reserve chief may shun the elf hat and jingle bells, but at least one Wall Streeter believes the central bank's half-point lowering of interest rates Wednesday might well be the Fed cut that saved Christmas.

If consumers take the rate cut as a green light for one more round of refinancing, it could free up cash to spend on the holidays. And merchants found a reason to be optimistic Thursday when the nation's chains posted a better-than-expected rise in October sales with three weeks to go before the traditional post-Thanksgiving kickoff of the holiday season.

"This may be the last round of refinancing, and it could actually save the Christmas season," independent market strategist Barry Hyman told CNNfn Thursday.

Merchants are worried that the recent spate of shaky economic news, combined with the lingering effects of a 10-day lockout of West Coast ports that clogged holiday shipments, a potential war with Iraq and a spate of corporate accounting scandals could hurt profits at the most critical time of year for retailers.

Worried that consumers, whose confidence in the economy tumbled last month, will tighten their wallets this holiday season, the Fed slashed interest rates half a point, going further than the quarter-point cut many had expected.

Though Hyman doesn't necessarily believe consumers will instantaneously refinance, he said the Fed's rate cut could give a lift to consumers' confidence in the economy.

"I agree that this was a psychological boost because the Fed is freaked that the consumer is starting to back out, and they want to...try to make the Christmas season a little more palatable," Hyman said.

Barry Hyman, an independent strategist, talks about the Fed cut, refinancing and the holiday shopping season. Play video (QuickTime, Real or Windows Media)

Others are not so sure. Though Americans have proved their resilience in the face of tough economic times, taking out home loans and refinancing existing ones at a breakneck pace and taking advantage of zero-percent financing deals on new cars, they have become more skittish in their spending at stores.

The Fed cut likely means there will be a new round of financing, but with a paperwork logjam at the banks and the two to three months it typically takes to push through a refinancing, the cut comes too late to help the holiday season, said Sung Won Sohn, chief economist at Wells Fargo Securities, whose Wells Fargo bank is the nation's largest home lender.

"The problem is the bottleneck. The industry simply is not able to process the applications fast enough," Sohn said. "They (homeowners) are trying to refinance...But the increase in demand will simply increase the waiting list."

Meanwhile, retailers on Thursday reported a 3.1 percent jump in October sales at stores open at least a year, a key gauge known as same-store sales. Forecasts had initially predicted an anemic 1.5 to 2 percent rise.

Merchants said a spate of cold weather sparked winter clothing sales that benefited nearly every retail sector, but specialty chains and discount stores in particular.

"Apparel certainly can be weather-dependent and certainly that was the case," said Michael Niemira, chief economist at the Bank of Tokyo-Mitsubishi.

Though October's results proved consumers are willing to spend given the right incentive, in this case cold weather, chances are it will take more than the biting slap of a cold October wind to persuade shoppers to buy that big-ticket toy for little Johnny and Jane.

Sohn believes consumers' fundamentals remain healthy, helped by low interest rates and the fact that real income is still on the rise and unemployment, though higher, remains at a modest 5.7 percent. Inflation is virtually non-existent right now as well, meaning Americans' buying power is on the mend.

However, he said this latest rate cut and a one-month spike in clothing sales does not necessarily translate into a solid holiday season.

"I'm not bullish on the holiday shopping season, but I'm not as bearish as some people have been," Sohn said.