Fed to Meet on Rates, Look Down the Road

Wall Street Journal (09/15/08) P. A2; Reddy, Sudeep
Experts originally expected the Federal Reserve to hold the federal-funds rate steady at 2 percent when it meets on Sept. 16, but Lehman Brothers' financial troubles and the belief that economic growth will brake by year's end has led some to anticipate calls for a rate cut. However, observers point out that the central bank must contend with improvements in inflation at a time when the labor, housing and financial markets remain weak. They predict the Fed will hold off on raising rates until the housing market shows signs of recovery and officials are confident that the credit sector will not be negatively impacted by tightening policy.