Washington ? Federal Reserve Chairman Alan Greenspan today hands over the reins for steering the world’s largest economy to his successor, Ben Bernanke.

Bernanke’s first big test will be determining when and how to break Greenspan’s streak of 13 interest rate increases – expected to be 14 after today’s Fed meeting, Greenspan’s last – which began in June 2004.

It’s no small question, and the answer will have tremendous impact on all Americans.

Raise rates too high and housing prices could slump, credit card fees could surge, and the cost of borrowing for college or a new car could become punishing.

Ease credit too soon and risk being seen by global financial markets as soft on inflation. Investors in stocks and bonds, traders in currencies and gold, and foreign governments that buy U.S. government debt could all lose confidence in Bernanke’s monetary management. That could spark a crisis that spreads across the globe.

So what to do? Keep raising rates? Pause? Begin cutting?

Ben Bernanke testifies before the Senate Banking Committee on Capitol Hill during a Nov. 15 confirmation hearing on his nomination to be the next Federal Reserve Board chairman. He is expected to be confirmed today.

“I think there’s some pressure for the Fed to keep going over the near term,” said William Dudley, chief U.S. economist for Goldman Sachs & Co. in New York.

That’s a view shared by James Paulsen, chief investment strategist for Wells Capital Management, a division of Wells Fargo Bank. In a January report to investors, Paulsen noted “this tightening cycle began from the lowest interest rate in almost half a century” and reverses steep defensive rate cuts made to boost the U.S. economy after the Sept. 11, 2001, terror attacks panicked the markets and risked recession.

“Without a ‘depression panic,’ short-term rates probably would have bottomed fairly close to where they are today,” Paulsen wrote. “Essentially, the Fed has just now returned interest rates back to recession lows and can now ‘begin’ to tighten.”

Many on Wall Street believe that Bernanke’s Fed will continue raising rates. Futures markets, which project investor expectations, suggest a nearly 60 percent chance that Bernanke will keep tightening rates in March.