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Reply #30: Fed seen taking out a little rate cut insurance [View All]

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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Oct-31-07 08:40 AM
Response to Reply #9
30. Fed seen taking out a little rate cut insurance
http://www.reuters.com/article/bondsNews/idUSN3128732620071031?sp=true

WASHINGTON (Reuters) - The Federal Reserve is expected to lower benchmark borrowing costs modestly on Wednesday as an additional bulwark against the risk a housing slump and tighter credit drag down the rest of the economy.

Fed officials, who will announce their decision around 2:15 p.m., resumed their two-day meeting at 9 a.m.

They have offered few clues on their likely course of action, but financial markets are betting that a spate of weak economic data will lead policy-makers to cut overnight U.S. interest rates by a quarter-percentage point, to 4.5 percent.

That would follow last month's surprisingly large half-point reduction, a move Fed officials had hoped would put them out in front of any potential economic weakness.

"In an economic expansion that had already slowed, leading sectors continue to display surprising softness and further cautious policy action can help to contain a widening out of the damage," Citigroup economist Robert DiClemente wrote in a recent analysis.

...more...
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