Rate cuts everywhere!RTGAMGet a bunch of central bankers together to discuss a co-ordinated cut to their respective key interest rates and good things can happen.On Wednesday morning, the central banks of the United States, Europe,
Canada, the U.K., Switzerland and Sweden each slashed their rate by half of a percentage point. The Fed, which had been torn between a slowing economy and rising inflation, was unanimous in voting for the measure, issuing a statement saying that "incoming economic data suggest that the pace of economic activity has slowed markedly in recent months.
"The cuts take the U.S. key rate down to 1.5 per cent. In Canada, the key rate fell to 2.5 per cent.U.S. stock index futures, which had been down sharply, reversed course after the rate decision was announced, suggesting that stocks will rise at the start of trading. With about an hour before markets open, futures for the Dow Jones industrial average were up 42 points, to 9580. Futures for the broader S&P 500 were up 14 points, to 1019.
Things weren't quite a rosy overseas, though, despite some impressive rebounds. In Europe, the U.K.'s FTSE 100 was down 0.2 per cent and Germany's DAX index was down 1.4 per cent in afternoon trading.In Asia, Japan's Nikkei 225 plunged 9.4 per cent in overnight trading.
The Bank of Japan did not cut its key rate but said it supported the action of the other banks.Copyright 2001 The Globe and Mail