FISCAL: Credit Curb

Said a Wall Streeter: "Investors have had a bad psychological shock." The shock was a sudden drop in the price of long-term Government bonds. Last week's drop, over two points in some issues, was the biggest in more than a decade, and it touched off a wave of selling which quickly spread to corporate and municipal bonds. The New York stockmarket, which had been showing signs of a year-end rally, was stopped in its tracks. Cause of all this: a surprise move by the Federal Reserve System which curbed credit.

The Federal Reserve Banks, which have been buying U.S. bonds...

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