Interest rates cut

Worries of a potential recession will weigh on the US Federal Reserve when it meets later today with Ben Bernanke expected to cut rates. Fed Chairman Ben Bernanke, facing his first major test since taking over from Alan Greenspan in early 2006, has been sending signals that he is prepared 'to act as needed' to cushion the impact on the economy from the market turmoil.
A change in the funds rate, now at 5.25 percent, is reflected immediately in banks' prime lending rate, the benchmark for millions of consumer and business loans. The prime rate is currently at 8.25 percent. Most economists are predicting that Ben and his colleagues will choose to reduce the federal funds rate only by a quarter point although a few economists see the chance for a bolder half-point move. But analysts agreed that whatever the Fed does on Tuesday will likely not be the last word on the subject. Many economists are predicting a string of three or more rate cuts as the central bank works to calm financial markets and keep the worst slump in housing in 16 years from pushing the country into a recession.

We will wait and see what impact this has on the USD!