Forecast: No U.S. Interest-Rate Rise Until Summer 2003

By John S. McClenahen Lots of CEOs and economists continue to wonder whether the policy-setting Federal Open Market Committee (FOMC) will cut short-term interest rates at its next scheduled meeting on Sept. 24. When then might chairman Alan Greenspan and his FOMC colleagues begin to raise rates, something that only three months ago they were expected to do about now? "The first increase in interest rates has been pushed out to early next summer," asserts DRI-WEFA Inc., a Lexington, Mass., economic forecasting firm. "The lack of investment, deterioration of consumer sentiment, uncertain stock market, weak job growth and deteriorating conditions abroad all argue against an early shift to tightening."

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