Fed to cut rates to manage risks, analysts say

October 30 2007 MarketWatch.coom Many economists believe theFederal Reserve will cut its policy interest-rate target by a quarter-percentage point to 4.5% on Wednesday to contain the risks that financial market turmoil could continue, possibly leading to a recession "The risk of a financial-market disruption spilling over into real economic activity is too serious for the Fed to ignore," said Kevin Logan, U.S. economist at Dresdner Kleinwort, in a note to clients. "Not easing at this juncture runs the risk of a financial market catastrophe and a possible recession." Simply put, economists said the debt crisis is not over, and the danger exists that banks won't be able to make loans and mortgages, even to buyers with good credit history and high income.

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