US Federal Reserve not inclined to cut rates

SYDNEY, Sept 16 - The U.S. Federal Reserve is not inclined to cut interest rates at its policy meeting on Tuesday but could signal a willingness to ease in the future, given turmoil in financial markets, the Wall Street Journal reported on its web site on Tuesday.

"Federal Reserve officials aren't inclined to veer from plans to hold short-term interest rates steady at Tuesday's meeting, even though financial markets are putting strong odds on a quick rate cut," the paper reported.

Markets began to price in a rate cut on Monday after Lehman Brothers' <LEH.N> collapse sent rocked financial markets.

"The Fed's thinking could change, particularly if there is another sharp deterioration in markets and the financial sector Tuesday," the Wall Street Journal reported.

"And even if officials decide to stay on hold, they could signal in their end-of-meeting statement a greater willingness to consider rate cuts if the economy or markets worsen," said the report.