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After making headlines Friday and Monday for its reaction to the near bankruptcy of Bear Stearns, the Wall Street brokerage house, the Federal Reserve Board stayed in the news by reducing short term interest rates from 3% to 2.25%. CBS' Anthony Mason calculated that rates have been cut by three points from 5.25% just since October in reaction to a lack of available credit. He ticked off homeowners, college students and buyers of automobiles as three groups having difficulty obtaining loans. On the other hand, NBC's George Lewis visited retirees at the Laguna Woods Village whose interest income from fixed investments is plummeting as rates come down. Wall Street traders reacted by buying. The Dow Jones Industrial Average jumped 420 points to 12392. ABC's Betsy Stark (embargoed link) did acknowledge the Fed's moves have resulted in a 12% drop in the value of the dollar and an increased risk of inflation, "but for now fighting inflation takes a back seat to fighting the credit crisis."
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