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Article: Fed Cuts Federal Funds Rate, Signaling Eased Credit Stance
- Article from:
- The Washington Post
- Article date:
- June 7, 1989
- Author:
CopyrightThis material is published under license from the Washington Post. All inquiries regarding rights should be directed to the Washington Post. (Hide copyright information)
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The Federal Reserve, which usually shrouds its intentions in
secrecy, yesterday took pains to send an unmistakable message to Wall
Street that it is easing slightly its grip on the nation's credit.
The Fed's decision to allow a quarter-point reduction in the
closely watched federal funds rate was the first break in a
determined 15-month anti-inflation campaign that drove up interest
rates by more than 3 percentage points.
The action followed clear signs that economic growth has
slackened substantially in response to higher borrowing costs.
Because the Fed acted only after interest rates had already
fallen in the money market and the bond market and after commercial
banks lowered the ...