A cut in interest rates by Federal Reserve policymakers wouldn't entirely insulate Americans from the ongoing global financial crisis, analysts warn.

But it could go a long way - if followed by further cuts - to ensure U.S. consumers keep spending, businesses keep investing and banks keep lending."It's sort of like getting a flu shot that doesn't completely work. You still get the flu, but you don't feel as much pain," said economist Bruce Steinberg of Merrill Lynch.

The Fed appears on the verge of reducing short-term interest rates for the first time in nearly three years in the hope of cushioning the U.S. economy from financial turmoil worldwide.

Any reduction by the central bank in its benchmark federal funds rate, which banks charge each other on overnight loans, should be reflected within days in most banks' prime rate for their best business customers.

Rates on a wide range of consumer and business loans, from credit cards to auto loans to home-equity lines, are linked to the prime. One lender, Southwest Bank of St. Louis, led the way Friday by cutting its prime rate from 8.5 percent to 8 percent.

It moved after Fed Chairman Alan Greenspan delivered what economists said was an unambiguous signal the Fed was ready to cut the federal funds rate for the first time since January 1996.

Greenspan told the Senate Budget Committee on Wednesday that policymakers have to be "especially sensitive to the deepening signs of global distress" and the Fed must act "reasonably shortly to prevent the contagion from really spilling over."

Economists and traders believe there's little chance the Fed's monetary policy panel, the Federal Open Market Committee, will fail to make good on Greenspan's signal.

"Wall Street is not debating whether it will cut, but by how much," said economist David Jones of Aubrey G. Lanston & Co. If the Fed didn't cut rates, he said, "the stock market could crash."

In Washington on Monday, Congress voted to hold down the college student loan interest rate for all borrowers and raise the maximum grant amount for needy students.

The new formula, based on Treasury bill interest rates and added points, means the rate for students would be 7.46 percent for new loans - the lowest rate in 17 years - down from 8.23 percent last year, sponsors say.

Economist said Fed action probably would have little immediate impact on market-set long-term interest rates, such as 30-year, fixed-rate mortgages. They've already fallen to their lowest level in 30 years. But it probably won't hurt those rates.

Worldwide, a series of U.S. rate cuts would make dollar-denominated securities a little less tempting for global investors. That would ease downward pressure on currencies ranging from the Brazilian real to the Japanese yen.