The Federal Reserve was expected to announce another interest rate cut on Wednesday to stabilize the faltering economy.
Up to a half-percentage point cut in the federal funds rate was expected — that would bring the key benchmark to 3 percent. The Fed's policy-setting Federal Open Market Committee was expected to make the announcement at 2:15pm following its two-day meeting.
Such a move would come close on the heels of last week's surprise three-quarter point cut in the funds rate.
In explaining its aggressive move last week, the Fed said the outlook for economic growth had weakened and downside risks had risen. Policy-makers also said businesses and households
were beginning to feel the pinch of tighter credit.
The economy's weaker-than-expected performance in the fourth quarter — an anemic 0.6 percent growth rate — is likely to be a factor in the Fed's decision.