Cut in prime interest rate follows recent Fed activity
New York — Manufacturers Hanover Bank of New York and the First National Bank of Chicago , responding to a drop in the growth of the nation's money supply and apparent credit easing by the Federal Reserve, cut their prime lending rate half a point Monday, to 16 percent. Two smaller banks, UMB Bank & Trust in New York and Southwest Bank of St. Louis, have also lowered their lending charge.
Analysts had predicted the prime would decline, since the nation's money supply growth rate fell $9 billion over the past month. The Fed's report Friday of a $5.9 billion increase was smaller than anticipated and well within board targets.