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There is scope for a further reduction in interest rates.
"We've had a big reduction in interest rates that has reduced the cost of servicing the debt.
"Surely the thing that would most help small businesses is a sustained reduction in interest rates.
But that drop might overstate the new measure's success, as banks are pocketing much of the reduction in interest rates.
Brokers attributed tne im proved performance to the pos sibility that there may be a reduction in interest rates soon.
"Even the previously dismissed measure of a reduction in interest rates is back on the table," Mr. Smith said.
If a feared downturn failed to occur, for example, a small reduction in interest rates would be less likely to stoke future inflation.
"For larger businesses that issue bonds the impact will have been a direct reduction in interest rates, given that they usually borrow at a spread over government bonds.
THE large reduction in interest rates this year is a boon to debt-heavy homeowners and businesses, and it may yet save the economy from recession.
But Mr. Barbera said it would take a significant reduction in interest rates by the Fed "to prevent U.S. economic weakness from snowballing into recession".
Wall Street extended its rebound from the summer slump yesterday after dips in manufacturing growth and construction spending raised investors' hopes for a reduction in interest rates.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com