By Evelina M. Tainer, Chief Economist, Econoday
11/9/01

The Federal Reserve announced a 50 basis point rate cut on Tuesday, bringing the federal funds rate target down to 2 percent, its lowest level since 1961. This is the 10th rate reduction since the beginning of the year with a cumulative drop of 450 basis points. At some point, the Fed rate cuts of the past year will have a favorable impact on the economy - particularly when the lower rates are passed on to consumers, like zero financing on autos in October and at least most of November.