STATE OF BUSINESS: Tighter Money?

Will the tight money market get tighter still? Last week, Wall Street apparently feared that it would, and that worry, plus year-end tax selling and the Suez crisis (see below), sent stocks on the Dow-Jones industrial average edging down to 472.56, nearly 50 points off the peak last April. The tip-off to Wall Street was the U.S. Treasury's action: it had to offer an interest rate of 3.043% to sell $1.6 billion worth of 90-day bills, a rate slightly higher than the Federal Reserve's 3% rediscount rate. Traditionally, when the Treasury rate climbs above the rediscount rate, it...

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