Interest Rate Cut Predicted: The Federal Reserve,...

Interest Rate Cut Predicted: The Federal Reserve, responding to increasing signs of a recession, soon will cut interest rates in a move that should prompt banks to lower a variety of consumer and business rates, many private economists predicted. The Fed’s credit easing is likely to spur a one-half percentage point cut in the prime lending rate, and home mortgage rates should decline modestly as well, many analysts said. Any reduction in the prime rate, which has been stuck at 10% since January, would be seen as a boost to economic activity because about one-third of all consumer and business loans are tied to changes in the prime. The Fed’s top policy-making body, the Federal Open Market Committee, will meet today to map interest rate strategy.