US Federal Reserve expected to keep interest rates at record lows

January 25, 2009 21:34

With the US stuck in a painful recession, the Federal Reserve is widely expected to keep its key interest rate at an all-time low this week and examine other unconventional ways to lift the economy. Unlike other downturns, Fed Chairman Ben Bernanke and his colleagues are battling a three-headed economic monster: crises in the housing, credit and financial markets that - taken together - haven't been seen since the 1930s. While Bernanke has pledged to do all he can to provide relief, US President Barack Obama and Congress are racing ahead to enact an $825 billion package of increased government spending and tax cuts to revive the economy. Against that backdrop, the Fed is all but certain to hold rates near zero and may offer greater insights into what other steps might be taken to ease the problems. The Federal Open Market Committee - the central bank's main policy-making group - opens a two-day meeting Tuesday to assess economic and financial conditions, review the effectiveness of programs already in place to deal with the trio of crises and examine new relief options going forward.

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