More Interest-Rate Cuts Are Coming -- Though Probably Smaller

Jan. 13, 2005
Compiled By John S. McClenahen A month before the next scheduled meeting of the Federal Open Market Committee, Chairman Alan Greenspan is signaling that additional cuts are likely to come. The current period of sub-par U.S. economic performance "is not ...
Compiled ByJohn S. McClenahen A month before the next scheduled meeting of the Federal Open Market Committee, Chairman Alan Greenspan is signaling that additional cuts are likely to come. The current period of sub-par U.S. economic performance "is not yet over, and we are not free of the risk that economic weakness will be greater than currently anticipated, requiring further policy response," he says in classic Greenspanese. But think in terms of 25-basis-point cuts in the influential federal funds rate from here on, not of the five 50-basis point cuts that have occurred so far this year. The reason? By the fourth quarter of this year, the economy will start reflecting the monetary kick of previous cuts. Or, as Greenspan phrases it, "We also need to be aware that our front-loaded policy actions this year should be providing substantial support for a strengthening of economic activity later this year." The federal funds rate is now at 4%.

Popular Sponsored Recommendations

Empowering the Modern Workforce: The Power of Connected Worker Technologies

March 1, 2024
Explore real-world strategies to boost worker safety, collaboration, training, and productivity in manufacturing. Emphasizing Industry 4.0, we'll discuss digitalization and automation...

3 Best Practices to Create a Product-Centric Competitive Advantage with PRO.FILE PLM

Jan. 25, 2024
Gain insight on best practices and strategies you need to accelerate engineering change management and reduce time to market. Register now for your opportunity to accelerate your...

Transformative Capabilities for XaaS Models in Manufacturing

Feb. 14, 2024
The manufacturing sector is undergoing a pivotal shift toward "servitization," or enhancing product offerings with services and embracing a subscription model. This transition...

Shifting Your Business from Products to Service-Based Business Models: Generating Predictable Revenues

Oct. 27, 2023
Executive summary on a recent IndustryWeek-hosted webinar sponsored by SAP

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!