The US Federal Reserve is expected to cut interest rates today by at least a quarter-percentage point to fortify the economy against a credit crunch and housing slump.
Financial markets are betting the Fed lowers the benchmark federal funds rate by a quarter-percentage point to 4.25 per cent from its current level at 4.50 per cent, and think a surprise half-point reduction is not out of the question.
The US central bank meets against a backdrop of widespread unease over the sagging housing market and deepening gloom over exposure to delinquent mortgages at major financial institutions around the world.
At its last meeting on October 30th-31st, the central bank lowered rates by a quarter point, following up a surprisingly large half-point reduction in September.