Fed May Cut Rate Today

By: Associated Press Email
By: Associated Press Email

Washington (AP) The Federal Reserve ends its two-day meeting today. Analysts expect it will announce an interest rate cut of one-quarter of one percent.

And some think it might signal a willingness to move to the sidelines and allow previous rate cuts to work their way through the economy.

In response to the fed's expected action, the prime lending rate for millions of consumers and businesses would fall by a corresponding amount, to 5 percent. The prime rate applies to certain credit cards, home equity lines of credit and other loans.

Both rates would be the lowest since late 2004.

Fed chairman Ben Bernanke has said that rising prices are a source of concern and must be monitored closely. Even so, he and other fed officials are hoping that inflation will moderate in coming quarters.

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