
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, March 30, 1991                   TAG: 9103300074
SECTION: BUSINESS                    PAGE: A-10   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

FED OKS LOWER RATES/ POLICYMAKERS APPROVED CHANGE AT FEBRUARY MEETING

Top policymakers at the Federal Reserve unanimously approved lowering interest rates further if needed to bolster a weak economy, according to minutes of their February meeting released Friday.

Members of the Federal Open Market Committee, composed of Fed governors in Washington and six of the Fed's 12 regional bank presidents, endorsed by an 11-0 vote a policy that would allow for further credit easing if needed to fight the recession.

The FOMC met again Tuesday. While the deliberations from that session will not be revealed until May 17, many economists believe that the Fed again endorsed further credit easing if economic conditions warranted.

The minutes of the Feb. 5-6 meeting said that several policymakers had urged placing greater emphasis on promoting economic growth because "they were more concerned about the severe consequences of a potentially deep and prolonged recession than those of a sharp rebound in the economy, especially given current financial strains and fragilities in the economy."

The Fed did ease credit conditions further on March 8 after the government reported that unemployment had hit a four-year high of 6.5 percent in February.

The central bank engineered a quarter-point cut in the federal funds rate, pushing the interest that banks charge each other for loans down to 6 percent. It was the seventh time since Oct. 29 that the funds rate had been lowered as the Fed has pursued an aggressive credit-easing policy.

Some analysts are looking for another cut in the funds rate, perhaps as soon as April 5 after the government reports the unemployment rate for March. That rate is expected to rise to 6.7 percent or higher. Even if the unemployment rate does jump, some analysts, however, said they believed the Fed would wait before easing again, preferring to see whether inflationary pressures are subsiding.

The underlying consumer-price calculation has shown big jumps in the last two months, reflecting higher costs for a variety of items from postage stamps to women's clothing.

The central bank remains under pressure from the Bush administration to lower interest rates further to insure a recovery from the recession by midyear.

by CNB