US banks cut rates after Greenspan hint
Southwest Bank of St Louis, often ahead of the pack, lowered its prime rate from 8.5 per cent to 8 per cent, a marker that others are likely to follow.
Alan Greenspan, chairman of the Federal Reserve, gave the world a very broad hint on Wednesday that a cut in the Fed's benchmark Federal Funds rate was likely when its decision-making body meets next week.
He cited the stock market decline, the crisis in Asia and their likely restraining effect on inflation as reasons why the central bank was now less concerned about the risks of price rises and more worried about slowing growth.
Figures released yesterday show that the US economy is indeed slowing down. Growth in gross domestic product slowed down to an annual rate of 1.8 per cent in the year's second quarter, revised figures showed, down from a white-hot 5.5 per cent in the first quarter.
Though this is an increase from earlier estimates of 1.4 per cent and 1.6 per cent, it indicates that growth for the year as a whole is likely to be around 2 per cent, down from the rate of roughly 4 per cent of the past two years.
The factors slowing the economy were principally destocking, reversing the inventory growth which had built up in the previous six months, and a decline in net exports.
But business investment powered ahead nearly 19 per cent, housing shot up by 15 per cent and consumer spending was resilient, showing a rise of 6.1 per cent.
- 1 What, let gays get married? We must be bonkers
- 2 Rocky Horror star Tim Curry 'suffers major stroke'
- 3 Exclusive: How MI5 blackmails British Muslims
- 4 EDL marches on Newcastle as attacks on Muslims increase tenfold in the wake of Woolwich machete attack which killed Drummer Lee Rigby
- 5 Farewell, Shameless. Your heirs have work to do
BMF is the UK’s biggest and best loved outdoor fitness classes
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Nook is donating eReaders to volunteers at high-need schools and participating in exclusive events throughout the campaign.
Get the latest on The Evening Standard's campaign to get London's children reading.
Win anything from gadgets to five-star holidays on our competitions and offers page.