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Article: Tighter Fed policy raises stakes for continued economic growth. (Federal Reserve's tight credit policy expected to slow economy) (Brief Article)
- Article from:
- American Banker
- Article date:
- November 23, 1994
- Author:
CopyrightCOPYRIGHT 1994 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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WASHINGTON The latest increase in short-term interest rates fulfilled bond market wishes for a tighter policy from the Federal Reserve, but it also increased the chance that the economy will slow to a crawl in 1995.
Increasingly, Fed officials find themselves caught between the pressures of financial markets and an uneasy public that will be paying more for adjustable-rate mortgages, home equity loans, and other popular types of credit.
Interest rates are now higher than they have been in three years, wiping out any bond market gain that resulted from President Clinton's deficit reduction program. The rate on 30-year, fixed-rate mortgages has reached 9.20%, up from ...