A stock price bubble was created this fall when the Federal Reserve first cut interest rates, but central bankers had little choice but to press ahead, according to several economists.

"The Fed faced a dilemma," said Rosanne M. Cahn of Credit Suisse First Boston Corp. A failure to try to calm financial markets that were in turmoil over economic reverses in Asia and Russia would have caused pain, with no certainty that the benefits would have been worth the cost, she said.

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