Federal Reserve policymakers yesterday (Wednesday) reduced the benchmark Federal Funds rate to 1.0%, an aggressive half-percentage-point cut that central bank Chairman Ben S. Bernanke’s latest attempt to keep the widening financial crisis from tipping the world into a global recession.

The U.S. Federal Reserve is likely to cut rates tomorrow (Wednesday), possibly in conjunction with central bank counterparts in Europe, as fears of a global recession have intensified. However, the Fed has little room to maneuver as its benchmark Federal Funds rate is already at 2% and analysts remain skeptical that reducing it any further keep the United States from sliding into a prolonged recession.

The US dollar made a comeback after Federal Reserve chief Ben Bernanke warned that a weaker US currency encouraged inflation and said there would be no more rate cuts for the time being.

The greenback climbed more than 1 cent against the euro, and the price of gold dropped $8 after Bernanke’s remarks.

“All inflationary measures are rising and have been for over a year now,” says Keith Fitz-Gerald in Money Morning, “despite the fact that the Fed has apparently only just recently noticed inflation is rising faster than it would like.”

“Where is my stimulus check?” continues to be one of the most searched for phrases on Google, despite US Treasury Secretary Hank Paulson’s recent assurances that the government will have send out almost $50 worth of economic stimulus checks by the end of the month.

This from Forbes.com:

The first $7 bln of economic stimulus payments went out by electronic deposit last week to 7.7 mln people, Treasury Secretary Henry Paulson said on Thursday. The average payment was $920.

Almost $50 bln will have been sent out by the end of this month and another $50 bln by early July to a total of about 130 mln households, he said after touring a plant printing stimulus checks in Kansas City.

For American tax payers…