Rate cut leaves global investors wanting more

Pensions & Investments, October, 1998 by Kelly, Bruce

Bruce Kelly When the Federal Reserve cut a key lending rate by 25 basis points last week, global investors were left expecting - and wanting - more. Fed Chairman Alan Greenspan had hinted at cuts in his September testimony before the Senate Banking Committee. But money managers and pension fund executives read the cut as confirmation that his attention had turned away from the threat of inflation to that of recession.

'Our view is we might see another rate cut at the next Fed meeting' in November, said Steven Kornrumpf, director for the $63.6 billion New Jersey Division of Investments, Trenton. The cut in the overnight lending rate between banks, to 5.25% from 5.5%, had been discounted by U.S. and global markets, investors said. The Federal Open Markets Committee,...

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