Fed rate cut hints at the potential for another

Northwestern Financial Review, Jan 1, 2002

The Federal Reserve cut the overnight rate to 1.75 percent in December, the lowest level in 40 years. Fed officials hope their rate cuts will have a ripple effect and prompt spending by consumers and businesses. The Fed's 11 consecutive cuts last year have already produced a spike in the number of low-interest bank loans and a surge in the popularity of home equity lines of credit.

The Fed also released a statement along.with the cut addressing the possibility of "economic weakness in the foreseeable future." Some analysts suggest such language coming from the Fed foretells another cut down the road.