A key interest may be slashed to a historic low by tomorrow. The AP reported this morning:
The Federal Reserve is widely expected to ratchet down a key interest rate — perhaps to an all-time low — to prevent the sinking economy from falling deeper into the doldrums.
Federal Reserve Chairman Ben Bernanke and his colleagues open a two-day meeting Monday to take a fresh pulse on the ailing economy, which has been mired in a recession since last December, and to decide their next move on interest rates.
Fighting the worst financial crisis since the 1930s, the Fed already has pushed down its main lever for influencing the economy — the federal funds rate — to 1 percent, a level seen only once before in the last half-century.
Many economists predict the Fed will cut its rate in half — to just 0.50 percent when the session wraps up on Tuesday. A few think the Fed could opt for an even more forceful action — lowering rates by a whopping three-quarters percentage point or more. If that larger cut occurs, it would be the lowest on records that track the monthly average of the targeted funds rate going back to 1954. The funds rate is the interest banks charge each other on overnight loans.
Read the full AP story here.