In a bid to ward off some of the chill settling over the slow-moving US economic recovery, Federal Reserve policymakers were widely predicted to cut interest rates to a four-decade low today.
An overwhelming majority of Wall Street analysts expect the US central bank's Federal Open Market Committee (FOMC), set to begin meeting at lunchtime (Irish time), to lower rates for the first time this year in the face of evidence showing the economy's pace is rapidly cooling. A decision was expected to be announced early this evening.
The meeting was delayed by a day because of congressional elections.
"No monetary policymaker wants to see this economy slide back into another recession," said economist Ms Lynn Reaser of Banc of America Capital Management in St. Louis. "It now appears that monetary policy is facing a significant loss of confidence and that is likely to make the Fed inclined to provide some offset," Ms Reaser said, adding the most likely FOMC outcome seemed to be a quarter-percentage-point cut in the trend-setting federal funds rate to 1.50 percent.
A poll by Reuterson Friday of primary dealers - Wall Street firms that deal directly with the Fed - found 19 out of 20 predict the Fed will try to energise the sluggish recovery with a jolt of cheaper credit.
Fourteen saw a quarter-percentage-point reduction, while five foresaw a more aggressive half-point slash.
At the last meeting of the FOMC on September 24th, policymakers opted to keep rates unchanged, but two voting members of the committee broke ranks and urged an immediate rate cut.
The US economy completed four quarters of expansion to this year's third quarter, averaging about a 3 per cent annual rate of growth after contracting for three straight quarters at the beginning of 1991.
But the recovery has hinged on consumers' willingness to keep spending on new cars, homes and other goods, while businesses have been reluctant to increase investment.