The US Federal Reserve has begun a two-day meeting that is expected to result in a quarter-point cut in interest rates.

Experts believe the Federal Reserve will make the announcement on Wednesday.

As a result, the Dow Jones industrial average fell 28.22 points, or 0.22 per cent, today, to 12,842.93.

Earlier, new statistics showed that consumer confidence in the US has fallen for the fourth month in a row as concerns over soaring inflation and a weakening job market continue.

Jim Herrick, director of equity trading at Baird & Co, told the Associated Press news agency: “There’s no panic out there [in the market] because of the consumer confidence numbers, but there is more concern about inflation then we had just a few weeks ago.

“Everyone is interested in what the Fed will do about it.”

Reuters reported that the small interest rate expected tomorrow could be the last in a series of cuts dating back to last September.

The US central bank opened its policy-setting meeting today and a decision is expected some time on Wednesday afternoon.

A quarter point cut to two per cent is believed by experts to mark the end of interest cutting for the foreseeable future.

US president George Bush claimed in a press conference earlier that “this is a tough time for our economy”.

Mr Bush also criticised the actions of the Congress, saying: “Across our country many Americans are understandably anxious about issues affecting their pocketbook, from gas and food prices to mortgage and tuition bills.

“They’re looking to their elected leaders in Congress for action. Unfortunately, on many of these issues all they’re getting is delay.”