News > Economy
Bush meets biz leaders
January 3, 2001: 4:06 p.m. ET

Applauds Fed move to cut rates, names Lindsey as chief economic advisor
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NEW YORK (CNNfn) - President-elect George W. Bush met with top U.S. business leaders in an economic forum in Austin, Texas, on Wednesday, just as the Federal Reserve announced an unexpected cut in short-term interest rates.

The Fed's surprise move was applauded by Bush who has repeatedly said he is worried about an economic slowdown.

"I am pleased that the Fed has cut interest rates. I think it was needed," said Bush. "It was a strong statement [by the Fed] that measures need to be taken to make sure our economy does not go into a tailspin."

Bush also said that the Fed's "bold action" would complement his tax relief efforts. (542K WAV) or (542K AIFF)

graphicOn Wednesday, Bush named Lawrence Lindsey, a former Federal Reserve governor and the main architect of Bush's $1.3 trillion tax cut plan, to be his chief economic advisor.

The central bank lowered on Wednesday the fed funds rate, the rate banks use for overnight loans, to 6 percent from 6.5 percent. The Fed cut the discount rate, which it uses when it loans funds to banks, to 5.75 percent from 6 percent. The unusual move came almost four weeks before the Fed's next scheduled policy meeting, which is to take place Jan. 30-31.

The Fed cited weakening sales and production and lower consumer confidence for its decision and said it stands ready to cut the discount rate by another quarter point to 5.50 percent on the request of Federal Reserve Banks.

Bush called the session to take stock of the economy and to hear from business leaders regarding their best assessment of the economy and the short-term steps they believe he should take to keep the economy going.

Aides said Bush would also talk with the business leaders about his $1.3 trillion tax cut proposal.

Among those attending the forum were chief executives of companies that have been hit the hardest by the recent slump in the stock market and declining sales.

Participants in the forum included: Michael Dell, founder of Dell Computer; Steve Forbes, Bush's one-time Republican presidential opponent and a flat-tax advocate; and Ken Lay, the head of energy company Enron.

Also present were Craig Barrett from computer chip maker Intel, Jack Welch, the chairman of General Electric, and Richard Wagoner, the head of General Motors.

For Thursday, Bush plans another session with high-tech industry executives. graphic

--from staff and wire reports


Bush meets corporate CEOs, others to consider economic health - January 3, 2001


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