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Wednesday, January 23, 2008

Surprise Rate Cut May Speed Recovery Of Ailing US Economy

January 23 2007

There is no quick cure for what ails the U.S. and global economies, but if the Federal Reserve's emergency interest rate cut Tuesday can instill some confidence among consumers, consumers and investors, it may speed a recovery. Interest rate reductions take time to work, and they cannot undo the damage inflicted by the tumbling U.S. housing market and subsequent credit contraction that has curbed the flow of cash to households and businesses, pushing the economy to the brink of a recession. The Fed's efforts, coupled with a $150 billion fiscal stimulus plan of the Bush Administration, can coax cautious consumers and companies back to normalcy and shorten any U.S. downturn.

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