The Fed’s emergency three-quarter percentage-point cut Tuesday to the short-term interest rate was a boon to US markets, but whether the Fed will go lower in its interest-rate lambada remains to be seen. Most analysts expect a half-point cut, to 3%, at the Fed's meeting Wednesday, reports the Wall Street Journal; some see the possibility of another three-quarters.
“The Fed is in catch-up mode,” said one. A cut of either size would make the Fed's combined moves the steepest cut since 1982. Experts predict a Fed rate as low as 2.25%, depending on soon-to-be-released economic growth figures, but warn the Fed won’t drop as far as in the early 2000s, when the 1% rate contributed to creating a housing bubble.