Money: Squeezing Until It Hurts

In response to Washington's battle against inflation, the cost of borrowing from U.S. banks last week climbed to a historic high. For the third time in six weeks, major banks raised their prime rate, the interest that they charge their best corporate customers for loans. The latest increase, from 6¾% to 7%, is in tended to help curb the nation's overexuberant economy by making credit so costly that businessmen will borrow and spend less. Because they operate in directly, such restraints at best take effect only after a time lag of weeks...

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