Wednesday, March 14, 2001
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Posted on: Wednesday, March 14, 2001

Half-point reduction by Fed appears likely


When will investors break even?

USA Today

WASHINGTON — The Federal Reserve seems headed for its third half-point cut in interest rates this year when it meets Tuesday.

Indicators continue to paint a confusing picture of an economy that might be on the verge of getting better — or about to decline into a worsening slump.

Fed watchers’ forecasts change with almost every new piece of data. Friday’s better-than-expected employment report had some analysts suggesting the Fed might cut rates just a quarter of a point, while Monday’s stock market collapse convinced others that a worried Fed might cut rates by a hefty three-quarters of a point.

But the consensus has settled at a half-point, which would match the two half-point cuts the Fed made in January when it began trying to revive an economy that looked as if it was headed into recession. There have been hints since then that the economy has turned up, but the numbers have given no clear sign.

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