The US Federal Reserve is expected to lower interest rates today by half a point to prevent the US economy slipping into recession.
The announcement is expected this afternoon when the Fed ends a two-day meeting in Washington dominated by bleak economic indicators.
The latest bad news came yesterday in the form of a consumer confidence survey that showed the belief of US shoppers in continuing good times is crumbling faster than economists predicted.
Whatever is decided, the effect of the rate adjustment will reverberate in stock and currency markets around the world.
The Federal Reserve chairman, Mr Alan Greenspan, cut federal funds interest rates from 6.5 to 6 per cent on January 3rd to stimulate growth, which he forecast would be "near zero" for the current quarter.
A further cut today is expected to encourage further investment confidence.
The slump in consumer confidence in January raised new concerns among Americans about the fragility of their economy after an eight-year boom. The New York-based Conference Board said yesterday that consumer confidence plummeted in January to its lowest level in four years, driven down by growing fears of a recession.