Fed Likely to Cut Rates TodayTHE WASHINGTON POST -- WASHINGTON
Wall Street is counting on Federal Reserve officials to lower their target for overnight interest rates today by three-quarters of a percentage point to help the hapless stock market regain its footing and keep the economy from sliding into a recession.
Wall Street may well be disappointed. Fed Chairman Alan Greenspan has promised that the central bank will respond “aggressively” to the abrupt slowing of U.S. economic growth, but it’s far from clear exactly what that means in the swirling crosscurrents of the U.S. and world economies.
A survey of 121 analysts and economists completed Monday by Stone & McCarthy Research Associates, a financial markets research firm, found that nearly two-thirds of them believe the Fed will cut the 5.5 percent target by half a point. Less than a third are looking for three-quarters, while a half dozen said the Fed would slash rates by a full percentage point.
The key issue at Tuesday’s meeting might be how Greenspan and his colleagues assess not just the economic outlook but the impact their choice will have on the expectations of investors, consumers and business executives weighing capital spending decisions.
White House Pushes For New Energy SourcesTHE WASHINGTON POST -- WASHINGTON
President George W. Bush and his top advisers warned Monday that the United States is facing a looming energy crisis that could further undermine the economy and produce widespread power blackouts as the White House made its case for a broad overhaul of national energy policy.
Bush said he saw no “short-term fixes” to the country’s energy problem as he met with a panel headed by Vice President Dick Cheney that is preparing detailed recommendations for ways to boost domestic production of oil, natural gas and coal.
The administration is trying to build support for an ambitious new energy policy that could include opening up Alaska’s Arctic National Wildlife Refuge and other federally protected lands to oil and natural gas drilling, and propose increased reliance on coal.
The administration’s moves followed the weekend disclosure that OPEC oil-producing countries intend to cut production by 1 million barrels a day, a decision that could result in increased gasoline prices for American motorists this summer.
IMF Refuses Another Financial Rescue Program for TurkeyTHE WASHINGTON POST -- ISTANBUL
For the past week, Turkish Prime Minister Bulent Ecevit has been asking allies and neighbors for $25 billion to help rescue his country from its crippling financial crisis.
On Monday he got an answer from one of the biggest potential donors, the International Monetary Fund: no, not until Turkey has done more to pull itself out of financial turmoil.
The IMF joins a growing number of Western nations and lending institutions offering little more than enthusiastic moral support to a country the United States considers a critical NATO ally, a secular buffer in a region of expanding Islamic fundamentalism and an important developing market in the global economy.
Meanwhile the Turkish government grappled over plans for righting its teetering economy, which has experienced more than a 30 percent drop in the value of its currency in three weeks. The government also released plans for economic, political and judicial reforms required for candidacy in the European Union.