Loan costs affected by Federal Reserve's decision.

Publication: Daily News (New York, New York) (via Knight-Ridder/Tribune Business News)

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COPYRIGHT 2005 Daily News

Byline: Daniel Dunaief

Sep. 20--The Federal Reserve meets today for the first time since Hurricane Katrina ripped through New Orleans, causing untold billions in damage and threatening to slow the economy.

What's at stake is the image of the Fed, the cost of your credit card bills, and the rate you'll get on your certificates of deposits.

The Fed has to choose between showing muscle by raising rates for the 11th straight time since last summer, or showing heart, by offering the economy a break after the deadly and costly storm.

"For a lot of people, a Fed move will seem bizarre," said Ethan Harris, the co-chief economist at Lehman Brothers. "Here we are looking at a horrible disaster and the Fed hikes rates."

Indeed, the first day the markets...

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