Despite another gloomy report on the national economy, the Federal Reserve may well decide to wait a while before pushing interest rates lower, many analysts believe.
These analysts view recent comments by Federal Reserve Chairman Alan Greenspan and other Fed officials as signaling that the central bank is prepared to wait to assess whether it has done enough to revive a stagnant economy.Fed policymakers meet again Feb. 4-5 to review the impact of previous rate cuts. A key point of discussion at that meeting will be a Fed survey released Wednesday showing pervasive weakness around the nation and an economy the report described as "lackluster."
The review, based on interviews with business executives conducted by the Fed's 12 regional banks,
found that the U.S. economy remained stagnant, with little suggestion of a rebound outside of some modest gains in housing sales and construction.
Manufacturing output was declining in autos and other key industries, while retailers reported disappointing Christmas sales and bankers said they saw little demand for new loans outside of a rush to refinance existing mortgages.
The Fed's surveys, done eight times a year, have been growing decidedly more pessimistic since August, and analysts said there was no change in the latest report.