Money: Lower Interest Rates Ahead

Not long ago, the discount rate­the interest charge on Government loans to commercial banks­was the Federal Reserve Board's main tool for influencing the economy, and changes in the rate occasionally became hot political issues. In the past year and a half, the Federal Reserve has relied mainly on changes in the pace at which it expands the nation's money supply, and has let the discount rate stay at 6%. When the board finally cut the rate a quarter-point last week, the reaction in the financial community was cheerful butunexcited.

The reduction followed much sharper...

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