Fed Moves To Bolster Recovery: Central Bank Lowers 2 Key Rates; Some...
The Federal Reserve, worried that the nationÛªs slow recovery from recession might falter, yesterday cut two key interest rates in an effort to give the U.S. economy a shot in the arm.</br></br>Some major banks immediately followed by dropping their prime lending rate half a percentage point to 8 percent, a move that wdl lower interest payments on most business loans and on some consumer loans, such as home equity loans, as well.</br></br>The interest rate reductions followed government reports that retail sales fell 0.7 percent last month after a strong showing during the first half of the yearÛÓa possible sign, that consumers have begun to retrench.</br></br>The Fed, whose actions had been widely anticipated in financial markets, said it was also influenced by weak growth of the nation's money supply and reports that inflation remained low at both the producer and retail levels. And the Fed has been under pressure from Bush administration officials and members of Congress to do more to encourage economic growth.</br></br>ÛÏItÛªs good news," White House spokesman Marlin Fitzwater said. "I donÛªt think there's any doubt that weÛªre coming out of the recession.ÛªÛª 2.5	percent to 3 percent pace after stabilizing in the second quarterÛÓan outlook echoed in the latest national survey of some 50 prominent private economists by Blue Chip Financial Forecasts.