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American Morning

Two-Day Federal Reserve Meeting Begins Today

Aired June 26, 2001 - 09:07   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Well, Wall Street economists and main street investors are watching and waiting for the next move from Alan Greenspan. Federal Reserve Chairman and Fed policymakers open a two- day meeting today in Washington. Analysts are anticipating another cut in short-term interest rates.

CNN's Tim O'Brien joins us now from Washington with more on this.

Hi, Tim.

TIM O'BRIEN, CNN CORRESPONDENT: Hi, Kyra, good morning.

It's a hot sunny day here in Washington, and Alan Greenspan arrived here just about an hour ago, telegraphing nothing. We expect a one-quarter percent cut or one-fourth of a point or one-half a point cut. We've had five half-point cuts in five months and no visible effect and the question for the Fed is what to make of that.

Some economists say not much. It takes six months for these rate cuts to take affect anyway and they might start kicking in in the next couple of weeks. If that happens, another big rate cut now could be harmful, might be inflationary. On the other hand, there are those who say that the reason there's no impact is because the Fed is addressing problems not of its making and beyond its authority to fix such as soaring energy costs, such as over investment in Nasdaq, dot- coms and other high-tech firms.

So they're going to be discussing these factors and other economic indicators starting around 2:00 this afternoon, resuming tomorrow around 9:00 and we should get some sort of decision announced around 2:15. And, Kyra, oh to be a fly on the wall in the boardroom here today and tomorrow.

PHILLIPS: No doubt the talk would be interesting.

Tim O'Brien, thank you so much.

Well, you can follow the Fed's moves by logging on to our Web site. Check out CNN.com for the latest on Chairman Alan Greenspan's decision, how it will affect the market and your money. That's at CNN.com -- AOL keyword CNN.

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