January 4, 2001. Copyright 2000. Graphic News. All rights reserved.

SHARES SET TO SOAR

LONDON, January 4, Graphic News: THE Federal Reserve, confronted with new evidence of a rapidly weakening economy, took the dramatic action Wednesday of lowering a key interest rate by half a percentage point, the biggest reduction in more than eight years.

Wall Street soared on the surprise announcement, and President-elect Bush voiced his approval. He said such Òbold actionÓ was needed to avert recession.

The reduction to 6 percent in the FedÕs target for the federal funds rate, the interest that banks charge each other, was approved during an emergency telephone conference call between Federal Reserve Chairman Alan Greenspan and members of the FedÕs rate-setting committee.

The cut followed TuesdayÕs announcement that the key National Association of Purchasing Management index (NAPM) Ð which measures manufacturing output Ð had tumbled for five consecutive months. This was the lowest fall since 1991 when America was last in reccession.
/ENDS
Source Associated Press