Fed seeking finely tuned message to ward off inflation

0 Comments | AFP, June, 2008

WASHINGTON (AFP) — Federal Reserve policymakers open a two-day meeting Tuesday looking for a new message to keep inflation expectations in check, without having to boost interest rates, economists say.

The US central bank headed by chairman Ben Bernanke finds itself in a tough spot, with the US economy teetering on the brink of recession but signs of price pressures that are heating up dangerously.

The Federal Open Market Committee, set to announce a decision on Wednesday around 1815 GMT, is widely expected to hold the federal funds rate steady at 2.0 percent.

The central bank has slashed rates since last September by 3.25 percentage points in an effort to reignite growth, but officials are signaling that cycle of cuts is probably over, and that inflation is...