Fed Begins Meeting on Interest Rates

The Federal Reserve began its two-day meeting on Tuesday and is expected to drop interest rates to their lowest level in 45 years later it concludes Wednesday afternoon, news services reported.

Nearly all analysts said the Fed will reduce the federal funds rate again, which is the interest that banks charge each other on overnight loans, Reuters reported.

However, analysts are split whether the central bank will lower rates by a one-quarter of a percentage point or a one-half point, according to Bloomberg.

Low interest rates help spur consumer and capital spending, both of which can help the economy and the trucking industry. The Fed also believes the fresh tax cuts would help instill life in the U.S. economy.

Recently, the Fed has become worried about deflation, which is a prolonged period of falling prices. Deflation is dangerous because as prices fall, profit margins are squeezed, forcing firms to eventually cut wages.

The central bank has cut rates 12 times since the start of 2001, pushing the federal funds rate down to 1.25%, lowest since July 1961.

An announcement on interest rates is expected at 2:15 EDT on Wednesday.

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