Waiting on Fed to Make a Move

Washington Post (10/02/08) P. D1; Irwin, Neil
Charles Plosser, president of the Federal Reserve Bank of Philadelphia and a member of the central bank's policymaking Federal Open Market Committee, said he is receptive to lowering interest rates if market conditions continue to worsen. However, Fed leaders are generally uncertain that a rate cut would be able to boost the economy and are likely to wait for evidence of a dramatic downturn of the economy before taking such action. "There's a good chance we'll see that weakness, but they want the data to be there before they cut rates," said Julia Coronado, an economist at Barclays Capital. Wall Street expects a sharp cut below the current 2-percent level in the benchmark rate, and there has even been talk of a surprise cut ahead of the policymaking meeting slated for Oct. 28-29.