ECONOMY

FED MEETING BEGINS; HIKE EXPECTED The Federal Open Market Committee began its two-day meeting at 2:00 p.m. yesterday, as scheduled, a Federal Reserve spokeswoman said.

The Fed is expected to announce any decision the committee makes on short-term interest rates and release an accompanying statement on the economy at about 2:15 p.m. today.

The central bank is widely anticipated to raise its key federal funds rate by a quarter-percentage point to 5.25% in what would be the 17th consecutive rate hike by that amount during credit-tightening cycle that has extended to two years.

To anticipate future interest-rate decisions, financial market observers will carefully weigh language in the FOMC statement, focusing on descriptions of inflation. This month Fed Chairman Ben Bernanke and other Fed officials have signaled that key inflation gauges have risen to levels at or above the upper end of their comfort zone.

– Dow Jones Newswires

AUTOMOBILES

HONDA SELECTS INDIANA FOR $550 MILLION ASSEMBLY PLANT Honda Motor Co., boosting capacity to extend a 12-year streak of rising American sales, chose Indiana for its sixth North American assembly plant.

The $550 million Greensburg facility will employ at least 2,000 people when it opens in 2008, Honda said today at a news conference in the Indiana town. It will make as many as 200,000 four-cylinder autos annually, with the model to be named later.

– Bloomberg News