Auto Exec Expresses Optimism Over Fed Rate Cuts
Feb 6th, 2008 by gmoran
Mike Jackson, CEO of AutoNation has been an outspoken critic of the Federal Reserve in regard to its hesitancy to lower interest rates in recent months. Mike has felt for some time now that the Fed was behind the curve in dealing with the subprime mortgage crisis. With consumers feeling the pinch of rising mortgage payments and higher interest rates, the auto industry is directly in the crosshairs of declining consumer spending. During last weeks interview with Carl Quintanilla of CNBC, Jackson applauded the historic if not surprising 75 basis points reduction that the Fed and Chairman Ben Bernacke made on Jan 22nd and indicated that it was a major step toward straightening out the curve.
Following this bold move, Bernacke and the boys dropped the lending rate again last week by another 50 basis points bring the Federal interest rate down to 3.0.
Expressing optimism that the trough in the auto industry may start to abate, Mike was cautious and suggested the need for an additional 150 basis point reduction before years end.