The Federal Reserve, caught between mounting job losses and rising inflation, is likely to sit tight and hope that the interest rate cuts it has already provided will be enough to heal a sick economy.
The central bank started Tuesday's meeting with a new member. Elizabeth Duke, formerly an officer at a Virginia-based community bank, was sworn in by Fed Chairman Ben Bernanke before the closed-door deliberations got under way.
Private economists believe that when the central bank will decide during the discussions Tuesday to leave its target for the federal funds rate, the interest that banks charge each other, at 2 percent.
Bernanke and his colleagues are being forced to navigate treacherous waters, trying to keep the economy from plunging into a deep recession while worrying about keeping interest rates so low that they could trigger a dangerous inflation spiral.
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