P. M. BRIEFING : St. Louis Bank Cuts Prime to 11%; Others Expected to Act Next Week
In a move expected to be followed next week by the nation’s major banks, Southwest Bank of St. Louis said today it is cutting its prime lending rate to 11% from 11.5% effective Monday.
Chairman Emeritus I. A. Long said “the continuing deceleration in monetary growth, slowing economic activity and rising dollar all suggest the next move in interest rates should be downward.”
Southwest Bank is often seen as a bellwether in setting the prime rate, but other major banks did not go along with the lower rate today.
“There’s no doubt about it, their track record in leading changes in the prime rate is excellent,” said William Sullivan of Dean Witter Reynolds Inc.
Sullivan said that other banks may be waiting to see if the Federal Reserve sends a clear signal to the markets that it is adopting an easier credit stance.
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