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The Federal Reserve doesn't expect the recovery will be strong enough to quickly drive down the jobless rate, and acknowledged its efforts to keep the rebound going could feed a new speculative bubble. Record-low interest rates "could lead to excessive risk-taking in financial markets," according to documents released Tuesday of the Fed's closed-door meeting earlier this month. It also could cause consumers, investors and businesses to worry about inflation taking off. Although Fed officials saw the current likelihood of that as "relatively low," they pledged to "remain alert to these risks."

American International Group Inc. said Tuesday it will go ahead with a previously announced pay package for its new CEO Robert Benmosche of $7 million in cash and stock. Benmosche, who took over as CEO of the insurer three months ago, will get an annual salary of $3 million in cash and $4 million in AIG common stock under the pay agreement. AIG is under close government scrutiny after getting a bailout package worth up to $182.5 billion from the government in exchange for an 80 percent stake in the company. That bailout also includes restrictions on compensation for AIG's 100 highest-paid employees.

General Motors said it could decide next week to close Saab Automobile after the Swedish company that planned to buy the brand backed out. It was the third time in less than two months that a sale of a GM brand has been called off, reflecting the difficulty of selling underperforming divisions in the midst of a global sales slump. GM said Tuesday that its board planned to determine next week what to do with Saab. Closing the brand, as GM initially planned to do if it could not find a buyer, is a strong possibility, two people with direct knowledge of the company's plans said. The people spoke on condition of anonymity because the board has not made its decision.

US Airways will delay delivery of 54 new Airbus jets until at least 2013 and take other steps to boost its cash reserves until travel demand rebounds. The airline said Tuesday that putting off the deliveries will cut aircraft spending by $2.5 billion over the next three years.

Toyota Motor Corp. will recall 110,000 Tundra trucks from the 2000-2003 model years in Minnesota and other "cold weather" states to address excessive rust on the vehicle's frame. The government urged owners to remove the spare tire from the frame, concerned it could fall onto the road and create a hazard for other vehicles.

Japan Airlines said Tuesday it obtained government approval to receive up to $1.1 billion in emergency loans aimed at preventing the money-losing company from grounding flights.

NEWS SERVICES