Interest Rates Top Out

The rocketing rise of interest rates (TIME, June 10) has clobbered the housing industry, dried up funds for many companies and generally disrupted the entire economy. Last week it appeared finally to top out; indeed, banks' prime rate, or basic charge on business loans, began inching down. Manhattan's First National City Bank trimmed its prune a quarter of a point, to 11 1/4%, as did Southwest Bank of St. Louis and First National of Miami. Two Midwestern banks with the nation's highest prime rates also made reductions: Chicago's First National, from 11 3/4% to 11.6%, and Lansing's Michigan National, from 11 3/4% to 11 1/4%. The lowest prune rate was posted by Boston's small Harbor National Bank: 11%, down half a point.

Those rates are still oppressively high, and it is anyone's guess how much farther they might come down and how soon. But the cuts had a tonic effect on businessmen and investors, who have been starved for any kind of good news. On the stock market, the Dow Jones industrial average bounded up 19 points on Monday, 15 on Wednesday, and by the close of trading Friday had leaped 52 points for the week to 854.

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