The Fed's goal is to make money more available to consumers, who drive two-thirds of America's economy, and keep them spending. Most economists think the terrorist attacks of September 11, pushed the U.S. Economy, already weak after a year-long slowdown in spending by businesses, into a recession. "The terrorist attacks have significantly heightened uncertainty in an economy that was already weak," the Fed statement said. "Business and household spending as a consequence are being further damped." Recent data hinted that the beleaguered manufacturing sector, which has borne the brunt of a year-long slowdown in the general economy, was beginning to recover before the attacks. But there have also been signs that consumer confidence was beginning to wane before the attacks, and it has certainly done so in the days since. (Cnnmoney,10/02/01)

One may question if the Fed's policy moves are effective any more. After all, it would seem that nine rate cuts in a year would at least have had an impact on stock prices, whic

Unemployment has remained below seven per cent, despite 18 month in which only one quarter's GDP was strong and three quarters were in actual recession. The thousands of security jobs created at airports, businesses and offices seem to have offset most of the other jobs lost. An American Automobile Association poll released Aug. 29 showed that travelers confidence in airline safety has rebounded from 33 percent to 75 percent, indicating that most people think those long lines and big new baggage bomb detection machines are working.

The specter of a U.S. Economy sinking despite short-term interest rates at or near zero has been raised by several observers. It is also possible that the delayed impact of so many interest-rate cuts will hit all at once, forcing the Fed to raise rates again to cool the economy off and avoid inflation.

h usually resond positively to lower rates. Instead, major stock indexes, even before Sept. 11, were below the levels they held before the Fed started cutting rates. The stock market discovered that many of the numbers it had been using to try to make a case for buying expensive stocks ranged from aggressively promotional to outright lies and one of the Big Five accounting firms was convicted of fraud. (Maclean's, 9/16/02)

Some common words found in the essay are:
, Economic Advisors, Federal Reserve, GDP Retail, Bush Congress, Automobile Association, Steven Wieting, stock market, Joel Naroff, terrorist attacks, production fell, Smith Barney, consumer spending, consumer confidence, maclean's 9/16/02, auto sales, manufacturing sector, economy weak, year-long slowdown,
Approximate Word count = 910
Approximate Pages = 4 (250 words per page double spaced)