Falling Rates Make Consumers A Mite Nervous

Falling interest rates may eventually jump-start the economy, but they will have to overcome the ambivalent attitudes of consumers, according to a recent study by Joseph M. Kamen of Indiana University. In the study, 60% of a sample of 5,000 households indicated that Federal Reserve actions to lower interest rates suggest that the economy is in poor shape, compared with just 4% who regard such steps as a sign of economic health. In addition, although more respondents (33% vs. 22%) think that lower rates herald an eventually improving economy than believe the opposite, they also tend to believe that rate cuts imply the government doesn't know how to stimulate the economy.

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