WASHINGTON -- Poor Ben Bernanke.
If he does nothing, he might be out of a job.
If he cuts the U.S. central bank's key rate by a quarter of a percentage point, investors will rebel because it's not enough.
And if the bank goes big with half a point of rate relief, it will be a tacit acknowledgment by the rookie Federal Reserve Board chief that he badly misread the depth of the housing and credit morass.
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In the jittery lead-up to today's Fed meeting in Washington, Alan Greenspan has been so full of advice for his successor you might think he was still running the Fed.
If all that weren't bad enough, Mr. Bernanke doesn't have only the sputtering U.S. economy to worry about.
A crisis that was born in the frothy U.S. housing market of the past decade has truly gone global.
The 1920s-style run on British mortgage lender Northern Rock over the weekend is another painful reminder for Mr. Bernanke that whatever he does will be felt around the globe.
As Mr. Greenspan pointed out, Mr. Bernanke is in a bit of a box, with the possibility of inflation lurking out there.
But the Fed's ability to act is hamstrung because the era of disinflation is over, Mr. Greenspan told CNBC in one of a series of interviews to promote his newly published memoir, The Age of Turbulence: Adventures in a New World.
So every rate cut from now on could stoke inflation. Inflationary pressures have already begun to appear.
This makes steep and permanent rate cuts a dangerous option for dealing with the housing collapse. Too much interest rate stimulation could be seen as a reward to investors who took on excess risk. It could trigger inflation, which is already showing up in wages, as well as energy and food prices.
The lower the Fed goes, the more inevitably it means painful and unpopular interest rate hikes down the road.
"The Fed does have the capability of suppressing the type of inflation process which is going on," Mr. Greenspan told CNBC. "The difficulty is it will require very significantly higher interest rates. And when [former Fed chairman] Paul Volker successfully suppressed inflation in the early 1980s, he was vilified."
So what's Mr. Bernanke to do?
The most likely course is a quarter-point cut today, coupled with a clear indication that additional interest rate relief is on the way in the coming months. That's what most economists expect.
That would lower the Fed's benchmark rate to 5 per cent - the first rate cut in more than four years.
Some economists also speculated that the Fed will lower its discount rate for a second time in a month. The discount rate sets the interest charged commercial banks for emergency short-term loans.
Most also warn that a quarter-point cut is almost certainly going to be a big disappointment to investors. Based on trading in federal funds futures, investors anticipate a near 50 per cent chance of a larger cut.
Economist Mark Zandi of Moody's Economy.com said a quarter point would be a major disappointment -- and yet that's exactly what he's predicting.
"To provide a quick boost to the economy, policy makers must convincingly demonstrate that they stand ready to do what is necessary to ensure the expansion remains intact," Mr. Zandi said.
Mr. Zandi pointed out that the housing market slump is intensifying, the financial system is under strain, business confidence is shaken and job growth has stalled. And all this is likely to take a bite out of consumer spending in the months ahead.
The weakening economy, he said, justifies something more generous than a quarter point.
And so perhaps an alternative course of action is warranted. It's unorthodox, but a three-eighths of a percentage point cut might just be the Goldilocks solution - not too large, not too small, but just right. Split the difference, as it were.
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