Mixed News for Your Wallet

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WASHINGTON - Although lower interest rates are on the way from the Federal Reserve Americans may still want to get a grip on their wallets: higher prices are coming for food and gasoline.

Another Rate Cut

As economic woes and worries keep rising, it looks like the Federal Reserve may be ready to make another big cut in the interest rates.

Fed Chairman Ben Bernanke told senators Thursday the Fed "will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks."

Forecasters believe the Fed might cut rates a half a point at their next meeting in March - not just a quarter of a point.

That would be good news for consumers when it comes to interest rates they're paying on mortgages or their car payments.

And they need a break because there's little relief elsewhere with key prices rising steadily.

Bernanke says the main inflation pressures are coming from rising food and energy prices.

Oil hit another record high today -- more than $103 dollars a barrel in overseas trading.

That makes higher gas prices ever more likely with experts guessing between $3.50 and even $4 a gallon.

"I'm certainly aware of the price of oil, the price of gas, a daughter in college. There's a lot of money going out," said one consumer.

And food prices have already jumped sharply this year. That's because the cost of basic commodities like corn is soaring.

Bush: 'Hakuna Matata'

Ethanol bears some of the blame, as the rush to produce the alternative fuel from corn spikes demand beyond the ready supply. But the Bush administration is still talking positive about the economy.

"We believe in the long-term we are going to do just fine. This is a resilient economy," President Bush said.

The treasury secretary says that despite all the talk of a mortgage crisis, less than two percent of mortgages are actually in foreclosure.

Still some two million Americans are expected to lose their homes this year.

The squeeze on many consumers is so bad, it's leading to a disturbing trend. USA Today reports that more and more people who can no longer afford the daily necessities are buying those items the only way they can -- with credit cards.

Americans' revolving debt, most of which is on credit cards, rose almost eight percent last year, and will soon hit a trillion dollars.

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