Is the Federal Reserve playing coy about the prospect of an interest rate cut in December? Or is it demonstrating that it is indeed a more nimble central bank that can adjust policy on a dime?

Comments from Donald Kohn, the Federal Reserve's vice chairman, indicate that the "stress in the credit markets" noted in the Fed's economic projects released earlier this month still weighs heavily on the minds of Fed policymakers and that another rate cut may be on the table.

In a speech to the Council on Foreign Relations in Manhattan, Kohn noted that "the increased turbulence of recent weeks partly reversed some of the improvement in market functioning over the late part of September and in October.

"Should the elevated turbulence persist," he said, "it would increase the possibility of further tightening in financial conditions for households and businesses."

The shock to the financial system caused by the collapse of the subprime mortgage market remains difficult to assess. Several major banks have announced write-downs and charges as a result, but more hits are expected and the effect on credit is unclear.

The overall economy is slowing, with some analysts predicting a slide into recession. In another sign of a slowdown, orders for durable goods fell 0.4 percent in October, according to the Commerce Department, following declines of 1.4 percent in September and 5.3 percent in August.

"As the Federal Open Market Committee noted at its last meeting, uncertainties about the economic outlook are unusually high right now," Kohn said. "In my view, these uncertainties require flexible and pragmatic policymaking—nimble is the adjective I used a few weeks ago."

On the futures market, the odds of additional rate cuts increased. The December federal funds futures contract showed a 64 percent chance that the Fed will cut its benchmark rate a half-point, to 4 percent.