It cut rates by a-half point in September. That surprised stock market investors, who reacted by sending the key averages up to record levels in the weeks that followed.
Analysts say a quarter-point cut is more likely this time around.
The central bank is seen wanting to respond to a credit crunch that hit its peak in August. The fear is that the slump in the housing market could spread to the broader economy and cause a recession.
A reduction in the fed funds rate would be expected to reduce rates charged for home equity lines of credit and certain credit cards. It would also provide relief to borrowers with adjustable rate mortgages who face a reset of their rate at a higher level.