Federal Reserve Rate Cuts Likely to Affect World Inflation

(17 Sept. 07 - RV) The U.S. central bank meets tomorrow and is widely expected to cut benchmark federal funds rate, currently at 5.25 percent, by at least a quarter of a percent age point to help the economy weather a housing downturn and a credit crunch. Former Federal Reserve Chairman Alan Greenspan said the Fed should act cautiously in lowering interest rates because of inflation risks. Kishore Jayabalan is director of the Acton Institute’s Rome Office. He explains how the Fed’s decision could affect world inflation and the value of savings…