With signs of weakness showing throughout the U.S. economy, the Federal Reserve should reverse its course and cut interest rates by 2007, according to commentary and analysis from Euler Hermes ACI Chief Economist Dan North.

In a presentation to business leaders in New York City on September 19, North predicted that the next Fed move would be a cut in interest rates after a two-year period featuring 17 consecutive rate hikes followed by two months of holding rates steady. "It has been my contention that the Fed went too far in trying to put the brakes on the economy, and that has become evident in the recent economic slowdown," he said.

North's position was bolstered today by a speech from St. Louis Federal Reserve Bank President William Poole. Poole, speaking at Middle Tennessee State University, hinted at a rate cut "? if ... inflation risk is receding, then I will not hesitate to advocate policy easing."

Additional information is available at www.eulerhermes.com.