U.S. Chamber Commends Fed Rate Cut

WASHINGTON, D.C. – The United States Chamber of Commerce today commended the Federal Reserve Board's decision to cut the federal funds rate by an additional 50 basis points to 2.0 percent, the lowest since 1961. The Fed has cut its target rate by 4.5 percentage points since the beginning of this year.

"The Fed's top priority is to stimulate the economy," said Martin A. Regalia, Chamber vice president and chief economist. "The Fed is taking bold strides to minimize the size and scope of the current economic downturn with its latest round of interest rate cuts.

"The economy shrunk by 0.4 percent in the third quarter of 2001, mostly due to a weakening of consumer spending and a decline in business investment," Regalia said. "Today's rate cut will help to boost flagging consumer confidence and make borrowing for small businesses easier.

"The Fed alone cannot save the economy, however. Swift passage of an economic stimulus package by Congress – combined with the fiscal stimulus already in the pipeline – will aid in the Fed's efforts to boost economic growth," said Regalia. "With all this stimulus waiting to take hold, it is just a matter of time before the economy bounces back."

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.

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