Another Cut May Be Coming

Federal Reserve Chairman Alan Greenspan said yesterday that he was considering a reduction in interest rates for the third time in two months. He told the House Financial Services Committee that “the slowdown has yet to run its course” and that lowering the prime lending rate might rev up growth.

The economy grew just an annualized 1.1 percent in the fourth quarter of 2000, its weakest performance in more than five years. The slowdown was precipitous throughout the second half of the year, following a 5.6 percent increase in the second quarter. This was the smallest overall quarterly gain since a 0.8 percent annual growth rate in the second quarter of 1995.