US Fed poised to cut rates as unemployment soars

"However, our guess remains that the FOMC will opt for a 25 basis point cut."

Salomon Smith Barney economist Steven Wieting agreed.

The unemployment figures had sealed the fate of the Federal Reserve meeting, he said.

"We believe the Fed will still be compelled to ease 25 basis points at its meeting next week," he said.

"As the Fed tightened to a 6.5 percent fed funds rate last year, early signs of slowing were widespread. However, the Fed did not begin easing until those early warning signs turned into a marked deterioration," he added.

"We do not expect the Fed to stop easing until the current, early signs of recovery become concrete as well."