Filed under: Forecasts, Market matters, Economic data, Headline news, Federal Reserve

The Federal Reserve Open Market Committee (FOMC) meets tomorrow to decide what to do with interest rates. Based upon speeches by Chairman Ben Bernanke and other Fed officials, it is widely expected that the target Fed Funds Rate will be reduced by 0.25%, with an outside possibility that it will be reduced by 0.50%.

However, the most important outcome from the meeting is the perception that the Federal Reserve is going to stay ahead of the curve to prevent the economy from slipping into a recession. This is the biggest concern of the market. After the last meeting, the statement implying that the Fed was done lowering rates sent the market into a tailspin, despite a 0.25% reduction in the Federal Funds Rate.

The Fed will probably not make the same mistake this time. Here are a few things to look for in the FOMC statement Tuesday:

Continue reading Most crucial outcome from Fed meeting is trust

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This entry was posted on Tuesday, December 11th, 2007 at 8:42 am and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.