Trying to Puff Up the Sails

Interest rates are falling, but is the drop too late to save the recovery?

More than President Reagan or anyone else, Federal Reserve Chairman Paul Volcker caught the blame for the 1981-82 economic downturn. Now he is in danger of becoming the villain of Volcker Recession II. To prevent that unsavory sequel from materializing, the Federal Reserve Board has softened the tight-money stance it adopted earlier in the year and is letting interest rates fall. As a result, by last week a bidding contest was under way as banks rushed to drop the prime rate that they charge corporate borrowers. First New...

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