A lot has changed since the US Federal Reserve hinted two months ago it might be finished cutting interest rates for a while. Credit has become harder to obtain, Wall Street has convulsed again and the housing slump has intensified.
As a result, policymakers at the central bank now appear to have changed their minds about the need to drop interest rates again.
The Fed had cut rates twice this year and officials suggested in October that might be enough to help the economy survive the credit and housing stress. Then the problems snowballed, leading Fed Chairman Ben Bernanke to signal one more cut might be needed.
Analysts expect the Fed to trim its key rate, now at 4.5 percent, by one-quarter of a percentage point at the meeting tomorrow.
Banks, financial companies and other investors who made loans to people with spotty credit or put money into securities backed by those subprime mortgages have lost billions of dollars. Investors in the US and abroad have grown more wary, thereby aggravating the credit crunch.
This has added to the turmoil on Wall Street and Fed officials say they must take it into account when deciding their next move to keep the economy growing and inflation low and promote a stable climate that benefits investors.
The Fed will also be trying to ensure the banking system is sound and financial markets run smoothly.
But some may believe that lowering rates means the Fed is bailing out investors and encouraging firms to make bad decisions.
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