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Inflation will not get out of control, Bernanke promises...

1995 Dec 19 -1/4 5 1/2 Jul 6 -1/4 5 3/4 Feb 1 +1/2 5 1/4 +1/2 6 1994 Nov 15 +3/4 4 3/4 +3/4 5 1/2 Aug 16 +1/2 4 +1/2 4 3/4 May 17 +1/2 3 +1/2 4 1/4 Apr 18 +1/4 3 3/4 Mar 22 +1/4 3 1/2 Feb 4 +1/4 3 1/4 1993 No changes

NEW YORK, Dec 16 (Reuters) - The U.S. dollar tumbled versus the euro and the yen on Tuesday after the Federal Reserve cut interest rates more than expected to a record low, further diminishing the appeal of the greenback.

U.S. Federal Reserve Chairman Ben Bernanke said the latest bout of financial-market turbulence may put additional strain on the U.S. economy, signaling he is open to additional cuts in interest rates. In a text of remarks prepared for delivery last night in Charlotte, North Carolina, Mr. Bernanke said the housing downturn and related mortgage troubles are adding "greater than usual" uncertainty to the economic outlook. "These developments have resulted in a further tightening in financial conditions, which has the potential to impose additional restraint on activity in housing markets and in other credit-sensitive sectors," he said. His comments echoed the...

NAPLES, Fla. - Republican Fred Thompson said Tuesday the government should yank federal dollars from cities and states that don't report illegal immigrants. In his first major policy proposal, Thompson challenged presidential rivals Rudy Giuliani and Mitt Romney by criticizing "sanctuary cities" where city workers are barred from reporting suspected illegal immigrants who enroll their children in school or seek hospital treatment. "Taxpayer money should not be provided to illegal immigrants," Thompson said at a round-table discussion that included Collier County, Fla., sheriff Don Hunter. Thompson has argued his rivals are soft on illegal immigration because Giuliani, as New York...

Economy: What the Fed does Tuesday will set the tone not just for the rest of the year, but for the rest of the decade. With so much at stake, the central bank has to get it right. That means a bigger rate cut than expected. In this case, the right thing would be to drop the fed funds rate at least a half-point to 4.75%. This would help keep the credit crunch from morphing into an ugly recession — something the Fed can avoid if it acts quickly and boldly to re-liquefy the economy. A little over two weeks...

When the Federal Reserve meets today, a cut in its main short-term interest-rate target, the federal-funds rate, won't be the only thing on the table. Officials will also have to decide what action to take on the lesser-known discount rate, at which banks borrow directly from the Fed. Normally, banks pay a "penalty" to borrow from the Fed's discount window of one percentage point over the target for the federal-funds rate, at which banks lend to one another in a market heavily influenced by the Fed. Banks seldom borrow at the discount window because they can borrow federal funds more...

Economists see Fed raising rates in June, boosting them threefold-plus in 18 months: report. NEW YORK (CNN/Money) - The Federal Reserve will raise a key short-term interest rate to 2.5 percent 12 months from now and 3.5 percent by the end of next year, a newspaper reported Thursday. The Wall Street Journal said that 43 of 55 economists surveyed said they expect the central bank to raise its target for the federal funds rate, an overnight bank lending rate, starting in June, up sharply from a month ago when most economists surveyed said the Fed would raise rates in...

...But if this is his rationale, Mr. Dean should promise to stay within the spending limits until he emerges as the Democratic nominee. Sen. John Kerry (Mass.), who's considering a similar move, has made this pledge. But the Dean campaign isn't going along. Breaking the spending limits while the Democratic race is still on would be opportunistic and hypocritical for a supposed believer in campaign finance reform. It would give Mr. Dean a twofold advantage over his fellow Democrats in the guise of trying to defeat Mr. Bush. First, candidates who take federal funding (the government matches the first $250...