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BUSINESS BASICS CHANNELS 
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Fed Funds Down The Federal Reserve finally woke up to the slowing economy and loss of consumer confidence, cutting the Federal Funds from 6.5% to 6.0% on January 3rd. It was the first interest rate decrease in two years and the first time in two years that an action has been taken between official Fed meetings to set rates. The economy's growth has sunk to 2.2% annually, the weakest in four years. Retail sales were also slower than anticipated for the recent holiday season, perhaps due to a plunging stock market that made stockowners feel poorer. The cut has already provided a significant boost to the stock market. This is good news for small businesses. Credit has been tighter because of previous Fed actions, making it more difficult for business owners to get credit from banks, credit card companies and trade suppliers. Several banks have already cut their prime lending rate to businesses from 9.5% to 9.0% President-elect George W. Bush praised Federal Reserve Chairman for "a bold move," adding that `It was a strong statement that measures must be taken to make sure that our economy doesn't go into a tailspin.'' The Fed's outlook for inflation says that it "remains contained" which means that the financial wizards in Washington have decided recession is more dangerous than potential inflation. Greenspan and the Fed also indicated there may be more interest rate cuts in the future. -Cynthia Nemeth-Johannes
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