Wall Street Watching Fed's High Wire Act
Rate cut expected in unusually tough decision this week
By Kevin Spak,  Newser Staff
Posted Oct 28, 2007 6:32 PM CDT
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)
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(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.