Business Seeks Further Cuts From The Fed

A 25 basis-point reduction is not enough. That's the message two influential, Washington, D.C.-based business groups are sending to Chairman Alan Greenspan in the wake of the Federal Reserve's Sept. 29 decision to lower the federal funds rate, a kind of master U.S. interest rate, to 5.25%. "Rates should continue to be reduced as the global economy gets back on its feet, and the Fed should also increase open market operations to raise the global supply of dollars," says Jerry J. Jasinowski, president and CEO of the National Assn. of Manufacturers. What is most important about the Fed's decision is that it shifts policy priorities to lowering rates and stimulating economic growth, rather than highlighting inflation." The U.S. Chamber of Commerce is less charitable, terming the rate cut "underwhelming in its modesty." Says Martin Regalia, the business federation's chief economist, "The rate cut was a small step in the right direction that appeared to be taken more for its psychological effect than for any real impact."