The Federal Reserve is expected to leave benchmark lending rates unchanged at its policy meeting on Tuesday and will probably signal that borrowing costs will stay steady for several months, reports Reuters. Since the Fed’s last rate-setting meeting on Aug 5, the US economy has shown signs of weakening while price pressures have begun to recede, cooling calls for rate hikes. In addition, the possibility of a fresh bout of financial market turmoil could lead the Fed to look for ways to settle jittery nerves. Fed Chairman Ben Bernanke and his colleagues on the FOMC slashed benchmark overnight rates 3.25 percentage points to the current low 2% in seven steps from last September to April. Since then, two Fed meetings have left rates steady even as a sharp spike in oil prices raised concerns on inflation. With oil prices now off the boil and financial markets far from settled, analysts have been confident the next meeting or two will bring a similar outcome. If markets take a bad turn for the worse, however, the central bank could even hint at a willingness to lower rates.
