Fed Cuts Rate by 50 bps

May 15, 2001 (PLANSPONSOR.com) - As anticipated, the Federal Open Market Committee Tuesday cut the Fed Funds rate by 50 basis points in a continuing effort to boost what it said was a still flagging economy.

“The erosion in current and prospective profitability, in combination with considerable uncertainty about the business outlook, seems likely to hold down capital spending going forward,” the Fed said in a mid-afternoon statement. “This potential restraint, together with the possible effects of earlier reductions in equity wealth on consumption and the risk of slower growth abroad, continues to weigh on the economy.”

The cut follows recent data releases showing a weak manufacturing sector and increasing unemployment, which threaten to tip the economy into recession. The economy is kept afloat chiefly by construction activity and consumer spending.

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US investors flip-flopped after the Fed’s announcement as The Dow Jones Industrial Average fell, undoing a bounce up that occurred immediately after word of the rate cut was released.

The Nasdaq composite index was modestly higher, pulling back from an initial surge.

So far the central bank has cut rates four times since the start of the year in an attempt to spur investment and bolster economic growth.

Bush To Nominate EEOC Head

May 14, 2001 (PLANSPONSOR.com) - The Bush administration is ready to nominate candidates for two key government positions, including head of the Equal Employment Opportunity Commission (EEOC).

President Bush plans to name Cari Dominguez, a former high-ranking Labor Department official, to head the Equal Employment Opportunity Commission. He also plans to nominate Brian Roseboro, a risk management expert and former chief foreign exchange officer for the Federal Reserve Bank of New York, as assistant secretary of the treasury for financial markets.

Equal “Opportunity”

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Dominguez, currently a principal at Dominguez and Associates, a workforce issues consulting firm, previously served as director of the Labor Department’s Office of Federal Contract Compliance Programs and later as assistant secretary of labor for employment standards during the prior Bush administration.

Once confirmed by the Senate, Dominguez will be designated as chairman of the five-member commission, replacing Ida Castro, according to the White House. Dominguez will serve a five-year term expiring July 1, 2006.

Castro and the other two current EEOC commissioners are Democrats, serving in fixed, staggered five-year terms, the earliest of which expires in July 2002. Bush still needs to fill the fifth remaining vacancy and to name a new general counsel to the commission, according to BNA.

Dominguez, a native of Cuba, received bachelor’s and master’s degrees from American University and graduated from Massachusetts Institute of Technology’s advanced public management fellowship program.

Treasury Tap

If the Senate confirms his nomination, Roseboro’s duties would include oversight of the Treasury Department’s debt management operations.

Roseboro, 41, is deputy director of market risk management at American International Group.

He has previously worked at investment bank SBC Warburg Dillon Read and at the First National Bank of Chicago. From 1983 to 1986 he held several positions at the New York Fed, including chief dealer for foreign exchange trading, according to Reuters.

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