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American Morning

Unchanged Interest Rate May Signal Strengthening Economy

Aired January 31, 2002 - 07:35   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.
JACK CAFFERTY, CNN ANCHOR: On to business. The markets bounced back a bit yesterday, after the Fed announced that it was leaving interest rates unchanged, a possible indication that the Federal Reserve Board thinks the economy is strengthening. That was reinforced by the preliminary fourth quarter Gross Domestic Product number that came out on the plus side of the ledger.

Sasha Salama has her finger on all of this, and she is at the Nasdaq Marketsite. I guess the recession is over, huh, based on the GDP number?

SASHA SALAMA, CNN FINANCIAL NEWS: Well, not exactly yet.

CAFFERTY: All right. Okay.

SALAMA: But that was cute. Yes, it was promising. I mean, they were expecting GDP to go down, and it went up. And as you mentioned, the Fed came out, with Fred Speake basically saying, "even though we are still in a recession, the signs of an economic recovery have become more promising."

So that little nugget, Jack, is what the markets just bit right into and came off their lows.

CAFFERTY: The other story this morning is if you open a window and sniff the breeze, that odor in the air coming from Global Crossing reminds one of Enron a bit, doesn't it?

SALAMA: Oh boy, Jack. What a story this is. Global Crossing says that it locked down -- it prevented workers from selling their 401K shares, which is legally, and usually companies give their workers notice about that. But then, the smelly part is the part I think you are referring to. A former vice president of Global Crossing wrote a letter to the lead attorney at the company warning that the company's accounting practices sounded fishy.

CAFFERTY: Yes, that story has a ways to go too, it sounds like -- thanks, Sasha. I've got to move forward. I'll get back to you a little later on, as we move toward the opening bell.

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