BUSINESS BRIEFS
Fed mulls cut to key interest rate as economy sinks
Associated Press
WASHINGTON — With the country spiraling deeper into recession, the Federal Reserve is ready to slash its key interest rate — perhaps to an all-time low — in hopes of cushioning some of the economic fallout felt by many struggling Americans.
To battle the worst financial crisis since the 1930s, Fed Chairman Ben Bernanke and his colleagues already have ratcheted down their main lever for influencing the economy — the federal funds rate — to 1 percent, a level seen only once before in the past half-century.
The Fed opens a two-day meeting today to assess the economy and decide its next move on rates. Another reduction to the funds rate, the interest banks charge each other on overnight loans, is all but certain to be announced tomorrow.
Many economists predict the Fed will cut its rate in half. A few think the Fed could opt for an even more forceful action — lowering rates by a whopping three-quarters percentage point or more. If that larger cut occurs, it would be the lowest on records that track the monthly average of the targeted funds rate going back to 1954.
NO DECISION YET ON AUTO BAILOUT
WASHINGTON — The Bush administration tossed out no lifeline for the teetering auto industry yesterday and a Republican who blocked $14 billion in loans said it appeared the White House hadn't decided what to do.
With President Bush on an unannounced trip to Iraq, White House officials said they did not expect to make an announcement today.
The administration is considering ways to provide emergency aid to General Motors Corp. and Chrysler LLC, which have said they could run out of cash within weeks without federal aid. Ford Motor Co. has said it has enough cash to survive 2009 but asked Congress for a line of credit in case the financial markets deteriorate.
Sen. Bob Corker, R-Tenn., said he spoke with the White House early yesterday. "I don't think they yet know what they're going to do," he said. Ron Gettelfinger, president of the United Auto Workers, said the union had not held discussions with the White House.
N. KOREA GAINS 3G NETWORK
CAIRO, Egypt — An Egyptian company said it will launch 3G mobile telephone service in North Korea today, after winning the contract to build the advanced network in the country where private cell phones and Internet access are banned.
Under the terms of the deal reached in January, Orascom Telecom will invest $400 million in network infrastructure and license fees over the first three years to develop the network. Orascom said it would have exclusive rights for four years.
Initial subscribers would be largely restricted to top government and military officials. It was not clear what restrictions, if any, would be imposed on the network, which provides data capabilities as well as phone services in one the world's poorest and politically restrictive countries.
The Pyongyang government severely restricts information sources and Internet access is limited to top government and military officials.
BRAZIL EXEC WANTS LABOR LAWS EASED
SAO PAULO, Brazil — The president of the world's largest iron ore producer is asking the government to ease up on its tough labor laws as a way to avoid laying off workers amid the global economic crisis, a newspaper reported yesterday.
Roger Agnelli, president of mining concern Companhia Vale Rio Doce SA, personally conveyed to President Luiz Inacio Lula da Silva and trade union representatives the importance of "making labor laws more flexible," Agnelli was quoted by O Estado de S.Paulo newspaper as saying.
Before he became president, Silva gained prominence as leader of the nation's largest union.
Labor laws make it expensive for Vale and other companies to fire workers in Brazil.
