The Economy: Selective Stimulus

With slowdown signposts appearing all over the U.S. economy, the Federal Reserve Board last week moved to ease the cost of money. In its own words, the board meant to assure "that the availability of credit is adequate to provide for orderly economic growth."

In a two-stage order that becomes fully effective next week, the board reduced from 4% to 3% the amount of interest-bearing time deposits that banks must keep on hand as unlendable reserves. The change applies only to the first $5,000,000 of a bank's total time deposits; anything over that remains under the stiff 6% reserve requirement...

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