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Fed Meeting Today: Sources Say Rampant Emergency Rate Cut Speculation Unfounded

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The Federal Reserve's Board of Governors is meeting today. Although the meeting is officially a regularly scheduled meeting of the board, it has sparked speculation that the Fed may be preparing for some kind of emergency action prior to the March 18th meeting of the FOMC.
The official notice of today's meetings notes that a portion of the meeting will be held under "expedited procedures." The board will be considering "the advance and discount rates to be charged by Federal Reserve Banks." So you can see why people are getting excited.
The Fed's emergency rate cuts in January are widely viewed as a failure. The credit markets remain incredibly shaky, with declining municipal bond prices forcing several hedge funds to sell assets last week to meet margin calls. This has many wondering if the Fed could take action, perhaps as early as today, to ease credit markets.
This morning Charles Plosser, a member of the FOMC who is ordinarily considered an inflation hawk, gave a speech to a business group in which he vigorously argued that the economic downturn warrants further action to avoid falling into a recession.
"There will inevitably be special circumstances or shocks that fall outside the scope of our economic models that will warrant monetary policy action," Plosser said.
DealBreaker's usually reliable sources, however, assure us that there is no "secret plan" for a rate cut this afternoon. Two people familiar with the agenda for today's meeting deny that any emergency cut is likely to come from today's meeting. On Friday, the Fed announced it would conduct two auctions of 28-day credit through its Term Auction Facility in March. It will offer $30 billion in an auction to be held on Monday, March 10 and $30 billion in an auction to be held on Monday, March 24.