Business: Those Tumbling Rates

Recession brings a sudden drop in the high cost of borrowing money

With dramatic suddenness, America's interest-rate fever broke last week. The bench-mark prime rate, the interest that banks charge their best corporate customers, dropped from 20% only four weeks ago to 17%. The popular $10,000 six-month money-market certificates, which carried Golcondan interest payoffs of 15.7% only six weeks ago, were offering a mere 9.5%. Even mortgage rates took a tumble. California's Home Savings & Loan, the nation's largest thrift institution, dropped its home lending rate from 17.5% to 12.75%. Said Irwin Kellner, chief economist at New York's Manufacturers Hanover Trust: "Rates...

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