Temperance is a painful adjustment after a two-year binge. For the investors, businesses, and households that thought 5% economic growth was just part of the joy of the New Economy, 2001 will usher in a sobering reality. It's a classic case of the Federal Reserve taking away the punch bowl. The Fed's six hikes in interest rates, totaling 1(3/4) points, have resulted in tighter credit markets, slumping stock prices, and pickier banks, so much so that on Dec. 5, Fed Chairman Alan Greenspan suggested that some easing might be needed. Even so, the more restrictive financial conditions already in place will curb spending by both consumers and businesses, slowing 2001 economic growth to 3.1%, measured by real gross domestic product.
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