Brady Pushes for Lower Rates: Treasury Secretary Urges Deficit Action
Treasury Secretary Nicholas F. Brady yesterday said he had told Federal Reserve Board Chairman Alan Greenspan and other Fed governors that they should not "wait aroundÛ for a budget deficit agreement, but proceed now to lower interest rates, "and the sooner the better."</br></br>In a press conference with reporters prior to MondayÛªs economic summit in Houston at which the leaders of seven industrial nations wilt meet, Brady escalated the Bush administrationÛªs pressure on the Fed to reduce interest rates with an appeal to act in the national interest.</br></br>Acknowledging the "primacy" of the Fed in the area of interest rate policy, Brady said that "they're an enormously sensible group of individuals and they'll act when they see fit, but I think I see this as a U.S. national problem to which all roads should lead to one conclusion.Û</br></br>That conclusion, Brady suggested, is that the U.S. economy in its present stage requires lower interest rates because economic growth has fallen below the administrationÛªs targets. "It seems to me that itÛªs not a wise idea to emphasize an undying, forever, attack on inflation if it jeopardizes growth in this country,Û Brady said.</br></br>BradyÛªs unusual public comments on Fed policy underscore administration concerns over weak economic growth, which some officials fear could turn into a recession if interest rates do not fall. However, Greenspan and other Fed officials have been aiming all year at growth below the administrationÛªs forecast in order to hold down inflation.