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On Monday, Standard & Poor's credit rating agency downgraded RSA's debt to A- and put it on watch for further rating action within 90 days.
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"It would leave room for further rate cuts if needed.
But other economists said the economy was healthy enough that there was no clear-cut case for further rate cuts.
Some observers said they saw room for further rate cuts — to as low as 2 percent.
ReprintsMr King's hawkish stance was backed a day later by the OECD which said there was "not a compelling case for further rate cuts".
Because some Fed officials have recently "signaled that the door is open for further rate cuts, it's hard to see why they would want to risk a disappointment," said David J. Greenlaw, chief United States fixed-income economist at Morgan Stanley.
Like a number of other Fed officials, Mr. Greenspan is likely to resist any calls for further rate increases on the basis of a theoretical relationship between growth, unemployment and inflation.
The prospects for further rate cuts, and for the economy more generally, depend on what emerges when Mr Modi's finance minister, Arun Jaitley, presents his first full-year budget on February 28th.
As the political parties in Washington digested the economic policy implications of Tuesday's Republican victory in the midterm election, the Fed put aside internal differences over the need for further rate cuts and voted unanimously for the half-point reduction.
However, when looking at what the Taylor rule would have prescribed, an analysis in the latest annual report of the Bank for International Settlements BISS) finds little difference between the speed with which the Bank of Japan responded to its downturn in the early 1990s and the Fed's response last year (see chart).The Fed study gives Mr Greenspan justification for further rate cuts.
There is little scope for further rate cuts as inflationary pressures persist.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com