The U.S. central bank is expected to hold the key interest rate steady
at two percent at the end of a meeting on inflation and other economic
issues Wednesday in Washington.
The Federal Reserve's benchmark
rate influences interest rates for all kinds of loans, from mortgages
for individual homeowners to financing for large companies.
The
Fed has been cutting interest rates since September in an effort to
boost the U.S. economy, which has been hurt by falling home prices,
plunging consumer confidence, tight credit, and soaring energy prices.
But
interest rates that are too low could boost inflation, and Fed Chairman
Ben Bernanke has been warning that the risk of inflation is growing.
Central banks fight inflation by raising interest rates, but most
economists expect the Fed to balance the need to boost the economy with
the need to fend off inflation, and keep rates where they are for the
time being.
Some information for this report was provided by AFP, AP, Bloomberg and Reuters.
