January 04, 2008 |
|Slowing factory activity, weakening job growth and a credit crunch have investors expecting aggressive interest-rate cuts from the Federal Reserve.|
But this week's surge in the prices of oil and gold underlines why the Fed may not have the freedom to ease monetary policy as much as it did in 2001, when the economy slumped, or as much as many on Wall Street want.
The Fed and the markets agree the economic outlook is worrisome. Minutes of the Fed's December meeting released Wednesday show Fed policy makers share Wall Street's concern that the economy could fall into recession.