Aug. 21 May Not Finish Fed's Rate Cuts

ByJohn S. McClenahen In contrast to the recent mixed news on U.S. economic growth, things are "unambiguously weak on the inflation side," says Maury Harris, chief North American economist at UBS Warburg, New York. Harris, like many other economists, expects that Chairman Alan Greenspan and his colleagues will lower the influential federal funds rate by 25 basis points to 3.5% when the Federal Open Market Committee (FOMC) meets on Aug. 21. And like several other forecasters, Harris has the Fed on hold for the rest of the year. That could change, however. "We will clearly need to see improvement in the [economic] data soon to stop [the FOMC] from easing again on Oct. 2," Harris says.