Fed Takes Center Stage This Week

The Federal Reserve holds its monthly meeting this week and will make its decision on interest rates Wednesday afternoon.

The Fed has already slashed the key rate to a record low, zero to 0.25 points.

One possibility that might help the economy include a decision by the Fed to buy long-term Treasury notes to further drive down mortgage rates. Another option is to increase the amount of debt issued or guaranteed by Fannie Mae and Freddie Mac. The risk to these action is the likelihood of stimulating the inflation.

During Sunday night’s interview on CBS’ 60 Minutes, Fed Chairman Ben Bernanke was optimistic that the end of the recession is in sight.

"We've seen some progress in the financial markets, absolutely," Bernanke said. "But until we get that stabilized and working normally, we're not going to see recovery.

"But we do have a plan. We're working on it," Bernanke said. "And, I do think that we will get it stabilized, and we'll see the recession coming to an end probably this year."

Source: The Associated Press, Jeannine Avera, Ieva Augustums (03/16/2009)