When the Federal Reserve meets Wednesday, observers say that it’s likely that it will leave rates at the current record-low level between zero and 0.25 percent.

"Fed policymakers don't want to let up until they are absolutely sure an economic recovery has taken hold," says Bill Cheney, chief economist at John Hancock Financial Services. "Overall, their tone is going to be pretty pessimistic. The economy is still spiraling down and all the negative forces are feeding on each other."

Some economists believe the Fed will also announce a program to loosen credit for auto, student and small business loans. They predict that if this program works, it will be expanded to include mortgages.

Source: The Associated Press, Jeannine Aversa (01/25/09)