3 big banks cut prime rate after fall in money supply
New York — Three of the nation's largest banks reduced their prime rate by one-half a percentage point to 16 percent. Third-ranked Chase Manhattan bank started the move and was quickly followed the Morgan Guaranty Trust and First National Bank of Chicago.
The moves follow a $3 billion plunge in the nation's basic money supply that was reported late last week by the Federal Reserve Board. Analysts said the drop in the money supply probably would permit the Fed to loosen its tight grip on themoney supply and bring about lower interest rates.