Fed's hands tied by weak dollar

"The Fed is in a bind. The report last week showing a loss of 63,000 jobs in February was the clearest sign yet that the economy may be heading into recession...if it isn't already in one.

But can the Federal Reserve really afford to cut interest rates by another three-quarters of a percentage point next week, as some are predicting? With inflation still a major cause for concern, the Fed is running out of wiggle room if it hopes to successfully accomplish both of its mandates: keeping inflation in check and ensuring that the economy continues to grow at a steady pace."

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Fed's hands tied by weak dollar - Mar. 10, 2008