Federal Reserve Board

When it comes to the Federal Reserve these days, one question dominates: How low will it go? The central bank has already cut its benchmark rate to a measly 1%, but most economists think the Fed's rate-setting committee will take that down another notch or two when it ends a two-day meeting in Washington today. The consensus bet is that the central bank will lower its benchmark rate to 0.5%, but a few economists say they wouldn't be surprised if the Fed takes it all the way down to 0.

Federal officials moved closer Wednesday to guaranteeing as much as $500 billion in mortgages after they are modified to make them more affordable to homeowners, part of the multifront battle to resuscitate the country's flagging economy. The idea, outlined last week by Federal Deposit Insurance Corp. Chairwoman Sheila C.

The Federal Reserve's interest-rate cut Wednesday -- the second in three weeks -- will lower the financial burden of many consumer and small-business borrowers. Savers, meanwhile, stand to earn less on their bank deposits and on money market mutual funds, although the timing of a significant drop in yields on those accounts is less certain than usual. Here's a look at some of the effects of the Fed's cut in its benchmark rate to a four-year low of 1% from 1.

As Federal Reserve chairman, Alan Greenspan testified before Congress on dozens of occasions over almost two decades. Time after time, lawmakers hung on his every word, soliciting the wisdom of "the Oracle" on the economy. But not Thursday. This time, instead of praise, angry lawmakers in an ornate hearing room heaped blame on the 82-year-old economist for the current financial crisis and demanded to know how he could have been so wrong. Grim-faced, Greenspan could offer only a limited defense.

The Federal Reserve's cut in its benchmark interest rate Wednesday could put more money in your pocket -- or take some out. Or both. Figuring out how you're affected may be more complicated than usual. Here are questions and answers: Will I earn less on my bank savings? If you have money in interest-earning bank accounts or certificates of deposit, you can expect to be "as disappointed as Cubs fans," said Greg McBride of Bankrate.com in North Palm Beach, Fla.

Even in the midst of a severe meltdown on Wall Street, Federal Reserve officials at their September meeting believed the risks from weaker growth and higher inflation were roughly equal. The Fed officials discussed the financial turmoil during their closed-door meeting Sept. 16, according to minutes released Tuesday. The meeting occurred the same day that investment bank Lehman Bros. Holding Inc.

American consumers got a rare double dose of good news Tuesday, triggering a broad stock market rally that sent the Dow Jones industrial average up more than 330 points. The Federal Reserve kept interest rates steady, which at the least should help the credit crunch from getting worse. And crude oil prices dropped again, closing below $120 a barrel for the first time since early May.

The Federal Reserve clamped down hard on mortgage lenders Monday, issuing rules designed to curb the sorts of risky and deceptive lending practices that helped trigger the subprime mortgage crisis. The Fed's action, although criticized by some for not going far enough, was widely seen as a crucial step in reasserting control over a financial market that had been allowed to run wild. "There's lots more to come," said Thomas Lawler, a former Fed official who is now a housing market consultant.

After the Federal Reserve's meeting this week, Fed policymakers are expected to voice a tough stance on inflation. Talk about poor timing. Though Wall Street's inflation concerns have not abated -- crude oil remains above $134 a barrel -- worries about the health of the U.S. financial system and broader economy have returned in force. Last week, Citigroup Inc.

Federal Reserve Chairman Ben S. Bernanke said Monday that the U.S. economic outlook had improved from a month ago and that central bankers would "strongly resist" any waning of public confidence in stable prices. "The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so," Bernanke said in remarks to a Boston Fed conference in Massachusetts. "The Federal Open Market Committee will strongly resist an erosion of longer-term inflation expectations."