Fed begins meeting to seek ways to lift economy

WASHINGTON - Federal Reserve policymakers have gathered to examine ways to lift the nation out of financial and economic turmoil as Americans fume over the government's handling of the AIG bailout.

Fed Chairman Ben Bernanke and his colleagues opened a two-day meeting Tuesday afternoon at which they also will take fresh stock of financial and economic conditions. They are all but certain to leave a key bank lending rate between zero and 0.25 percent.

What has really touched a public nerve: American International Group Inc. -- bailed out four times by the government to the tune of more than $170 billion -- paying $165 million in bonuses to employees who worked in a division blamed for the insurance company's near-collapse last year.

Stabilizing the nation's financial system is key to turning around the economy, Bernanke has said. If that can be done, then the recession might end this year, setting the stage for a recovery next year, he said.