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October 6, 2008 9:35:13 AM CDT

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Wall Street Watching Fed's High Wire Act

Posted Oct 28, 07 6:32 PM CDT in Business 

(Newser) – All eyes are on the Fed this week, with Wall Street expecting a quarter-point rate cut when the group meets Tuesday and Wednesday. But the decision is an usually tough one, the AP reports, with the tight rope between controlling inflation and keeping markets fluid more precarious than it has been for a while. Most investors think the Fed is more concerned about the credit crunch, but how long it will feel that way is unclear.

 Markets have already priced in a cut this week, and another in December. But record crude oil prices and a sinking dollar may be giving Fed chief Ben Bernanke inflationary concerns, and shivers will run through an already unstable stock market if he balks at further cuts.  A slew of other data will deluge Wall Street this week, including a GDP report and a jobs report; they're expected, AP says, to reflect slow growth and mild inflation.

Sources Associated Press, Wall Street Journal

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U.S. Federal Reserve Chairman Ben Bernanke awaits the start of the International Monetary and Financial Committee meeting at International Monetary Fund Headquarters in Washington, Saturday, Oct. 20,...   (Associated Press)
U.S. Federal Reserve Chairman Ben Bernanke waits for the start of the International Monetary and Financial Committee meeting at International Monetary Fund Headquarters in Washington, Saturday, Oct....   (Associated Press)
The Nasdaq MarketSite, left, is shown in New York's Times Square. Investors are waiting to hear about Fed rate cuts after a jittery week on the market: the Dow took triple-digit swings, although all three...   (Associated Press)
U.S. Federal Reserve Chairman Ben Bernanke waits for the start of the International Monetary and Financial Committee meeting at International Monetary Fund Headquarters in Washington, Saturday, Oct....   (Associated Press)
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Federal Reserve  • subprime mortgages  • Dow Jones Industrial Average  • Ben Bernanke  • inflation  • stocks  • markets  • credit


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