Mumbai: The US Federal Reserve is expected to cut its key lending rate between 50 and 150 basis points to 1 per cent or even zero per cent from the current 1.5 per cent, in yet another move to get out of the credit crisis that has threatened to push the US into a deep and prolonged recession.

Markets expect the Fed to cut its benchmark interest rate, by a minimum of 50 basis points, amid a tumbling of consumer confidence in October. Also, an increasing percentage of  Americans (37.2 per cent), are now finding that jobs are hard to get.

The Federal Open Market Committee (FOMC) is expected to announce its decision at the end of a two-day policy meeting on Wednesday.

The Fed has cut rates eight times over the past 13 months, bringing it from 5.25 per cent to 1.50 per cent, to counter the effects of a credit market crisis, that started with the collapse of the US mortgage market collapse, and has now spread across the world.

While some analysts expect the Fed to even cut rates to zero, on the lines of a Japanese decision in 1990, to counter deflation, most believe that the Fed may opt for a more realistic 50 bps move.

With US consumer price index already at a low, the Fed expects real interest rates have risen with falling inflation, and a tightening of monetary conditions faced by borrowers. The Fed is expected to give important hints on future policy while announcing its rate decision.

Japan, meanwhile, is also expected to follow a US lead in cutting interest rates this week, as the world's two largest economies try to protect themselves from the global financial crisis. BoJ is expected to consider cutting rates at a policy meeting on Friday.