Political Quotes

“There was considerable enthusiasm a couple of weeks ago when the Federal Reserve Board reduced interest rates for short-term interbank borrowings by .5 percent. Today, we learn why the Federal Reserve Board acted in that manner in an unusual format between its regularly scheduled meetings. The background is that the Federal Reserve Board Chairman, Alan Greenspan, had, for weeks, directed the Federal Reserve staff to closely track company earnings announcements and business executives' comments about their plans for such things as capital spending. Staff members have been working the phones, asking companies specific questions about their future intentions. What the Federal officials and the staff found out by early April was a disturbingly sour attitude among corporate executives, suggesting that many of them were hunkering down, concentrating on cutting costs and slashing investment plans. The policy planners concluded that quick Federal Reserve Board action was needed to try to break the psychological mindset lest it undermine the drag we pick up in economic growth later this year. Many Federal officials are hoping there will be a turnaround and that this action was necessary in order to turn that hope into reality. Unfortunately, today we have received some additional bad economic news. To quote from the report of the New York Times: The Nation's unemployment rate shot up by 4.5 percent in April, the highest level in 2.5 years.”