Fed Doesn't Want Rate Cut— But Markets Do
And they're expecting it. Bernanke's hands tied as Fed meets today
By Jason Farago,  Newser Staff
Posted Oct 30, 2007 7:09 AM CDT
Federal Reserve Chairman Ben Bernanke is shown in this 2006 file photo in Chicago. Bernanke and the Fed are deciding whether to cut interest rates yet again.   (Associated Press)
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(Newser) – Ben Bernanke and the rest of the Fed are meeting today to decide whether to cut interest rates again after September's surprise half-point reduction. Bernanke has made it clear that he'd rather not drop rates again. But, as Bloomberg writes, he might not have much of a choice: with home values falling and oil skyrocketing, the markets are desperate for—and counting on—some relief.

Bernanke has given lip service to how "challenging" making policy has been since the start of the credit crunch. But without a cut the Fed risks upsetting the markets and damaging the economy deeper. Economists are speculating that Bernanke will cut rates by a quarter- or even half-point, and federal funds futures prices confirm that traders think the cut's in the bag.