United States Federal Reserve Building is seen from the air over Washington, D.C. (File)

The U.S. central bank Tuesday begins a key two-day policy meeting that many economists predict will result in another interest rate cut, to help boost the troubled economy and stop a sell-off in global stock markets.

A week ago, the Federal Reserve cut the key interest rate by three quarters of one percent, down to 3.5 percent. A further cut of at least a quarter percent is expected when the Fed meeting ends Wednesday.

Stock markets around the world have declined recently as investors worry that a slowing U.S. economy could hurt businesses in the nations that trade with the United States.

European and most Asian stock markets bounced back Tuesday from a sharp drop on Monday, in anticipation of another U.S. interest rate cut.

Major indices in London, Paris and Frankfurt are up one percent or more in mid-afternoon trading.

Tokyo's Nikkei index closed three percent higher, while the Hong Kong Hang Seng and the Shanghai Composite index rose one percent.

Some information for this report was provided by AP, Reuters and Bloomberg.