U.S. Factory Orders Fall; Interest Rates Likely To Follow
Jan. 13, 2005
By John S. McClenahen Excluding semiconductors, new orders for manufactured goods fell in September, declining 2.3% to $318.1 billion, reports the U.S. Department of Commerce. That's not as large a percentage decline as the 3% that economists generally ...
ByJohn S. McClenahen Excluding semiconductors, new orders for manufactured goods fell in September, declining 2.3% to $318.1 billion, reports the U.S. Department of Commerce. That's not as large a percentage decline as the 3% that economists generally expected. But it is nearly six times greater than August's 0.4% decline and probably enough for the Federal Open Market Committee (FOMC) to lower short-term interest rates when it meets in Washington, D.C., on Nov. 6. A 25-basis-point cut in the influential federal funds rate to 1.5% is widely anticipated. And unless the U.S. economy dramatically improves during the next month, this week's expected cut probably will be followed by another 25-basis-point reduction when the FOMC meets on Dec. 10. That would put the year-end federal funds rate at 1.25%.
