The Fed Expected to Cut Rates Again

Ben Bernanke didn't tell Congress this week exactly what the Federal Reserve would do next, but the central bank chief certainly left Wall Street with the impression that a half-point cut is a sure thing.

Federal Reserve policymakers are scheduled to meet again on March 18. Right now futures listed on the Chicago Board of Trade indicate that investors are pricing in a 100% chance of a half-point cut and a 32% chance that the Fed will slash interest rates by three-quarters of a percentage point.

"A 50-point cut seems to be a reasonable compromise," said Stuart Hoffman, chief economist at PNC Financial Services. "Any more than that and he will catch some inflation flack."

Bernanke, as part of his semi-annual hearing on the Fed's monetary policy, spent two days testifying in the House and Senate and outlined the trio of challenges facing the Fed: an economy at risk of falling into a recession, topsy-turvy financial markets and the rising risk of inflation.

read the CNN story