Interest-Rate Drop Is Called A 'Positive Step' Fed Cut in Discount Rate This Week Is Aimed at Encouraging Consumers, Banks, to Spend. FEDERAL RESERVE BANK

Scott Pendleton, writer of The Christian Science Monitor, The Christian Science Monitor

THE Federal Reserve can lead bank customers to lower interest rates, but it can't make them borrow.

That's the reaction of many economists and businessmen to the Fed's latest cut in its discount rate, which aims to promote spending in order to accelerate the pace of recovery from the 1990-91 recession.

The rate cut is "a positive step that improves the consumer's ability to finance new cars. The uncertainty is what kind of effect that will have on the consumer's willingness," says Terry Sullivan, a spokesman for General Motors Corporation, which along with the auto industry as a whole has been starved for sales.

"This will help, but it's not going to be …

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Publication information: Article title: Interest-Rate Drop Is Called A 'Positive Step' Fed Cut in Discount Rate This Week Is Aimed at Encouraging Consumers, Banks, to Spend. FEDERAL RESERVE BANK. Contributors: Scott Pendleton, writer of The Christian Science Monitor - Author. Newspaper title: The Christian Science Monitor. Publication date: November 8, 1991. Page number: 1. © 2009 The Christian Science Publishing Society. Provided by ProQuest LLC. All Rights Reserved.

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