US central bank policymakers are expected to cut US interest rates for the 11th time this year when they meet later today.
With the US economy in recession and reeling from the after-effects of the September 11th attacks, there is near unanimity in financial markets that the policy-setting Federal Open Market Committee (FOMC) will opt for a quarter percentage point cut in its federal funds lending rate.
Eight of the ten rate cuts that began last January have been aggressive half-percentage-point ones, including the last three; two were smaller quarter-point cuts.
That has brought the fed funds rate, which governs overnight loans between banks, to a 40-year low of 2 per cent.
Policymakers are expected to shift to a smaller rate reduction, counting on a significant impact since the rate is already low and because the Fed is maintaining the momentum of one of the most determined rate-cutting drives in its history.
There is some hope in recent data, which the Fed aims to fan as much as it can through rate cuts. Any boost it can give to consumer and business confidence should increase chances the current recession, which began in March, will be a relatively brief one.
Most analysts foresee a mild recession, ending by mid-2002, with some saying the downturn is already bottoming out.
Wall Street appears to be banking on coming out of the economic downturn fairly handily, partly because stock prices have perked up in recent weeks while not even the collapse of energy giant Enron which initially rattled debt markets, has appeared to shake optimism.