The Fed is deciding between a quarter point interest rate reduction and no cut at all, with a half-point cut unlikely to be considered, according a report by the Wall Street Journal.

Greg Ip, a reporter for the Wall Street Journal wrote late Monday on the company's site that while the Fed would not ordinarily consider meeting market expectations of a rate cut as a goal in itself.

The Fed is widely expected to cut interest rates by a quarter point to 4.5 percent.

"But the current environment is more fragile than usual, and thus the consequences of disappointing the market are potentially more damaging," he wrote. "Against that, the Fed will have to weigh the risk that a cut will stoke inflationary psychology."

Ip added that that the Fed cut minimize those risks by either leaving the possibility to a future cut if keeps rates the same this week or by reducing expectations for lower rates ahead if it does drop interest rates this time.