OCR Text |
Show Reductions In Interest Rates By EDWARD THORLUND As predicted, two reductions reduc-tions in interest rates have taken place in recent weeks by the Federal Reserve Board and then by major banks. THE CURRENT outlook is for at least two more in the near future. By the end of September Sep-tember interest rates may well be down to 14 percent. If they go lower, that will probably be a very healthy sign. If they go lower and stay there throughout the year, that will not only be a promising sign, but would almost surely stimulate the economy like nothing no-thing else could. YET WALL Street and the business world in general remain re-main skeptical about the present pre-sent trend downward. There has been so much talk about heavy federal borrowing pushing rates up again in the last months of the year, some corporations are standing pat, to see how far lower interest rates will go. Only after they're satisfied lower rates are here to stay awhile will many corporation executives begin to implement recovery programs, expansions expan-sions or new sales projects. MEANWHILE, inflation continues to cause concern. The annual rate is still much improved but the trend of recent re-cent months up again is being watched closely. It's a disappointment to the Reagan Administration. There are those who feel only a White House decision to reduce the deficit whatever the cost will convince the business and world community commun-ity long-term recovery is at hand. And that could include defense spending cuts. THE ADMINISTRATION now says the 1983 deficit will be $120 billion. But some estimates esti-mates put the figure at $140 billion. bil-lion. That's too much government govern-ment borrowing to enable interest in-terest rates to go down, in the view of many economists. |