Philadelphia-area business leaders questioned whether yesterday's quarter-point rate cut by the Federal Reserve would do enough to buoy the mood of consumers. More cuts are likely as the Fed tries to guide the economy toward growth amid a housing and credit crisis.
Martha Lee Boyer
The real estate broker and owner of Imani Realty & Associates in Willingboro said consumer confidence might not get the boost it needed.
A key interest rate "was lowered, but not enough to make a difference. . . . It doesn't come out to benefit the consumer as a full quarter-percent interest-rate drop [once it filters through the financial system]. I'm disappointed."
The president of Wilkie Lexus, Martin Dealership Group and Lexus of Chester Springs, as well as of the Automobile Dealers Association of Greater Philadelphia, also expressed concern about consumer confidence.
"We have seen a reduction of floor traffic, and I think a lot of it has to do with consumer confidence. I think they are sitting on the sidelines waiting to see what will happen."
Gerard P. Cuddy
The president and chief executive officer of Beneficial Mutual Bancorp Inc., of Philadelphia, said the rate cut met his expectations.
"The Fed now has the burden of not just balancing growth with inflation concerns, but managing through the quality free fall in certain asset classes and the management of some of the country's largest banks and brokerage firms."
The chief investment officer of Haverford Trust Co., of Radnor, noted that the Fed kept the door open for further cuts.
"I think the quarter-point [reduction] means you'll absolutely get another rate cut, if not two more. I interpret that as a positive. The Fed is in an easing [lowering] bias. It doesn't want to say that because it doesn't want to come off as not being vigilant toward inflation."