Washington: The Federal Reserve is expected to lower interest rates to combat the credit crisis and spreading economic weakness.
Federal Reserve Chairman Ben Bernanke and his colleagues have been employing a variety of novel approaches to keep the economy out of a recession or at least moderate the impact of any downturn.
And financial markets are hoping for another big boost today with an aggressive cut in the Fed's key interest rate, the federal funds rate. Expectations are for a reduction of between one-half point and a full point.
If the Fed cuts the funds rate by a full point, it would be the biggest single rate cut in more than two decades.
Markets were up strongly before the Fed announcement after Lehman Brothers and Goldman Sachs reported better-thanexpected results for the first quarter. The Dow Jones industrial average jumped more than 200 points in early trading.
Treasury Secretary Henry Paulson made the rounds of the morning TV shows on Tuesday to underscore the administration's commitment to keeping turmoil in the financial markets from worsening a struggling economy.
"The priority we have is a stable, orderly financial" market, he said on CBS' The Early Show.
