Fed Rate Hikes Expected to Hurt Car Sales in 2018
- Analysts see U.S. demand drop in 2018 despite strong economy
- Cheap financing supported record seven-year streak of growth
Panmure Gordon's French Says Fed Models Aren't Working
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As automakers seal their first annual U.S. sales decline since 2009, expectations for more interest-rate hikes are contributing to the nearly unanimous view that car demand will drop again in 2018.
Few analysts anticipate sales this year will reach 17 million vehicles, which was just achieved for a third-straight year and only the fifth time in history. The Federal Reserve forecasts three rate hikes in 2018, crimping the free-flowing credit that helped fuel a record streak of demand growth now coming to an end.