Fed facing rates dilemma

MARKET NEWS

WASHINGTON -- The Federal Reserve will cut US interest rates this week, but analysts told FX Week the US central bank faces a quandary over the depth of the cuts.

"I think the argument centres on whether the Fed will go for 25 or 50 basis points," said Will Rugg, senior currency analyst at Standard & Poor’s MMS in London. "Fed officials have been putting a cautious spin on their comments, and they may wait for the first round of easing to take effect rather than cut by 50."

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