U.S. Chamber Welcomes Continued Easing by Fed

WASHINGTON, D.C.-The United States Chamber of Commerce welcomed the Federal Reserve Board's move to cut the federal funds rate by an additional 50 basis points.

"Today's move reaffirms the Fed's commitment to resuscitate our economy," said Martin A. Regalia, vice president and chief economist. "The Fed's combined cuts of two-and-a-half percentage points since the beginning of this year should provide a foundation for economic growth in the second half of the year.

"Because today's rate cut was so widely expected, it may not have the same buoying effect on equity markets as did the surprise cut on April 18. It should nevertheless underpin the gains achieved by the market over the last few weeks," Regalia said. "Furthermore, if prime bank rates follow suit, today's rate cut should lessen small business borrowing costs as well as boost consumer and business confidence.

"As important as the rate cut itself, the Fed's decision to maintain its economic growth bias is a clear expression of its willingness and intent to do even more if necessary," said Regalia.

The U.S. Chamber of Commerce is the world's largest business federation, representing more than three million businesses and organizations of every size, sector and region.

# # #

01-86