Interest rates are the one tool that can have a quick impact on market sentiment.
Mr. Clinton's promise of economic leadership, in a speech Monday, helped to steady major stock and bond markets Tuesday. But the expectation that the United States would have to take the lead in cutting rates triggered a fall in the dollar, which would be undercut by such a move. Speculation about lower rates was fueled by a statement issued Monday by finance ministers and central bank governors of members of the Group of Seven industrial nations. Dovetailing with Mr. Clinton's comments, the statement said that the balance of risks in the global economy had shifted away from inflation toward a slowdown of growth as a result of the economic crisis in Asia and other emerging markets. It also promised close cooperation to sustain growth and financial stability.