Fed set to cut rates, others poised to follow

The United States is expected to cut interest rates on Wednesday, a measure Japan, the European Central Bank and Britain are forecast to follow by the end of next week to bolster economies facing recession.

While dispensing with a repeat of the coordinated cuts made earlier this month, authorities fear the worst financial crisis in 80 years will usher in a long recession and are looking to individual rate reductions to soften the blow.

Hungary became the latest country to seek finance from global lenders, agreeing a rescue package worth $25.1 billion to shore up its currency and markets.

The International Monetary Fund said if the crisis was prolonged and many more countries asked for help, it could need more money.

(Article continues below)

The Federal Reserve is widely expected to cut U.S. rates by at least half a point to 1 percent, the lowest level since June 2004.

• A d v e r t i s e m e n t

Norway’s central bank was also seen reducing rates by 50 basis points to 4.75 percent on Wednesday.

“The picture is now so depressing that Norges Bank has to do whatever it can to decrease rates … as quickly as possible,” said Inge Furre, economist at Sparebanken Moere.

The Bank of Japan will consider cutting rates at a policy meeting on Friday but will watch market conditions before deciding, a source with knowledge of the matter told Reuters.

Full article here