JUSTIN COLE //

US consumer confidence is likely to fall significantly in the aftermath of the terrorist attacks against the World Trade Center and the Pentagon, tipping the world's largest economy into a recession and causing a further drag on slowing global growth, economists said.
Economists expect the FOMC to trim its key federal funds rate before its next scheduled policy meeting on Oct 2, in a bid to calm the country's financial markets following cash interventions by the European Central Bank and the Bank of Japan earlier today.
Economists are now expecting the economy, which has weathered a dramatic slowdown during the last 12-14 months, to fall into recession as consumers put their spending plans on hold in a period of economic and commercial uncertainty.
"The US economy will likely end up in recession, and the global economy perform worse than in the early 1990s slowdown," Lehman Brothers global chief economist John Llewellyn told clients in a briefing note.
Economists are particularly concerned about the impact yesterday's terrorist attacks will have on consumer confidence and sentiment because consumer spending, which accounts for roughly two-thirds of GDP growth, has been one of the few areas of the economy which has held up well.
The full impact on consumer spending will become clearer through the remainder of September and into the fourth quarter -- a period in which economists had been forecasting that the economy would return to growth.