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Article: Fed expected to cut interest rates this week; To defer deflation, the federal funds rate is likely to fall to a level last seen in the 1950s
- Article from:
- Telegraph - Herald (Dubuque)
- Article date:
- June 23, 2003
- Author:
CopyrightCopyright 2003 Telegraph - Herald (Dubuque). Provided by ProQuest LLC. (Hide copyright information)
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WASHINGTON (AP) - The Federal Reserve is prepared this week to
drop a key interest rate to its lowest level since President
Eisenhower's second term.
The central bank would be aiming to stave off an economic threat
absent since the Great Depression - deflation, a prolonged and
widespread decline in prices.
Policy-makers have mounted a virtuoso performance over the past
six weeks to influence financial markets without even cutting rates.
That should allay any worries that the Fed is in danger of running
out of ammunition to stimulate the economy with interest rates
already so low.
Analysts refer to the talking campaign as the Fed's "open mouth"
policy, using comments by Chairman Alan ...