The Fed could use “proposed new regulatory powers to try to stop credit and asset market excesses from reaching the point where they threaten economic stability,” reports the Financial Times.

According to the paper: “David Nason, assistant secretary for financial institutions, said the Fed could even use its proposed ‘macro-prudential’ authority to order banks, hedge funds and other entities to curtail strategies that put financial stability at risk.”

Meanwhile, all eyes are on the Fed and whether it will cut rates yet again to juice up the ailing US economy.

“US Federal Reserve policymakers will have to grapple with a moral choice that is well beyond the pay grade of central bankers,” says Martin Hutchinson, “choosing between the financial stability of US homeowners and world hunger.

“That’s not an exaggeration. Interest-rate policy normally only affects the world economy at the margin, but it has now been so expansionary for so long that the Fed’s interest-rate strategy has turned into a moral dilemma of sorts. In short, the central bank’s monetary policy will likely determine whether millions of U.S. homeowners lose their homes or millions of the world’s poor starve.”