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American Morning

Minding Your Business: Rate Cut to Rescue of Ailing Economy?

Aired June 26, 2003 - 07:46   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


JACK CAFFERTY, CNN ANCHOR: Another Fed cut -- a rate cut from the Fed. After two days of meetings, they lowered interest rates a quarter of a point, and then came out with a statement saying that they're more concerned about deflation than they are inflation.
Andy Serwer is here minding our business.

ANDY SERWER, "FORTUNE" MAGAZINE: Yes.

CAFFERTY: If that's the case, why didn't they cut 50?

SERWER: Well, because I don't think they feel the economy needs shock therapy. I mean, it was sort of a good news/bad news thing. They only cut by a quarter point. The markets didn't like it. They were actually booing on the floor of the New York Stock Exchange. The traders actually booed, which is really amazing.

CAFFERTY: Those guys are never happy.

SERWER: Yes, they aren't happy, that's right. Stocks sold off pretty significantly, I mean, a bit of a sell-off. But the good news is, you know, they don't feel the economy is in such bad shape that they have to resort to something which would be practically extreme, really, I think, Jack. So...

CAFFERTY: They also indicated that rates are going to stay very low for probably a very long time.

SERWER: Yes, and I mean, what they're also saying, you know, as part of that is that the economy is not picking up. I mean, that goes hand-in-hand with that point, which was really sort of the bad news. You know, they're not complacent. They're not standing pat. They're moving, they're tinkering, they're doing stuff.

CAFFERTY: Right.

SERWER: But, you know, basically they're saying that, you know, the recovery is so tepid, so mild, that we need this, but we don't need the shock therapy. I mean, think back a year or so ago when we had those hundreds and thousands of layoffs. You're not seeing that every day.

CAFFERTY: Right.

SERWER: You're seeing some improvement, but you're not seeing things going gangbusters.

CAFFERTY: Yes, we're not seeing a lot of hiring.

SERWER: That's right.

CAFFERTY: So, maybe the firing has subsided but the hiring hasn't kicked in yet.

SERWER: Yes.

CAFFERTY: What about the markets this morning? What do the futures look like?

SERWER: Well, the futures are up a little bit, so we are recovering. I mean, this would be a good morning to buy stocks because people freaked out yesterday and sold stocks. So, this morning, I mean, I look for a bit of a recovery.

You know, an interesting thing. Did you see this thing about Greenspan's book?

CAFFERTY: Yes, he's talking about deflation.

SERWER: Right.

CAFFERTY: He should be concerned about the deflation in the price of his book.

SERWER: Yes, this is really funny. Greenspan's book, "Maestro," on amazon.com, the price is falling. You could get one for 99 cents earlier this week. Today, it's going for 98 cents.

CAFFERTY: 98 cents?

SERWER: Yes.

CAFFERTY: Wow!

SERWER: So, deflation is a problem. It is.

CAFFERTY: And now, I understand the movie rights have not been sold as yet.

SERWER: Yes, that would be a sleeper, don't you think?

CAFFERTY: Yes, it would. Thanks, Andy.

SERWER: OK.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.





Economy?>


Aired June 26, 2003 - 07:46   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACK CAFFERTY, CNN ANCHOR: Another Fed cut -- a rate cut from the Fed. After two days of meetings, they lowered interest rates a quarter of a point, and then came out with a statement saying that they're more concerned about deflation than they are inflation.
Andy Serwer is here minding our business.

ANDY SERWER, "FORTUNE" MAGAZINE: Yes.

CAFFERTY: If that's the case, why didn't they cut 50?

SERWER: Well, because I don't think they feel the economy needs shock therapy. I mean, it was sort of a good news/bad news thing. They only cut by a quarter point. The markets didn't like it. They were actually booing on the floor of the New York Stock Exchange. The traders actually booed, which is really amazing.

CAFFERTY: Those guys are never happy.

SERWER: Yes, they aren't happy, that's right. Stocks sold off pretty significantly, I mean, a bit of a sell-off. But the good news is, you know, they don't feel the economy is in such bad shape that they have to resort to something which would be practically extreme, really, I think, Jack. So...

CAFFERTY: They also indicated that rates are going to stay very low for probably a very long time.

SERWER: Yes, and I mean, what they're also saying, you know, as part of that is that the economy is not picking up. I mean, that goes hand-in-hand with that point, which was really sort of the bad news. You know, they're not complacent. They're not standing pat. They're moving, they're tinkering, they're doing stuff.

CAFFERTY: Right.

SERWER: But, you know, basically they're saying that, you know, the recovery is so tepid, so mild, that we need this, but we don't need the shock therapy. I mean, think back a year or so ago when we had those hundreds and thousands of layoffs. You're not seeing that every day.

CAFFERTY: Right.

SERWER: You're seeing some improvement, but you're not seeing things going gangbusters.

CAFFERTY: Yes, we're not seeing a lot of hiring.

SERWER: That's right.

CAFFERTY: So, maybe the firing has subsided but the hiring hasn't kicked in yet.

SERWER: Yes.

CAFFERTY: What about the markets this morning? What do the futures look like?

SERWER: Well, the futures are up a little bit, so we are recovering. I mean, this would be a good morning to buy stocks because people freaked out yesterday and sold stocks. So, this morning, I mean, I look for a bit of a recovery.

You know, an interesting thing. Did you see this thing about Greenspan's book?

CAFFERTY: Yes, he's talking about deflation.

SERWER: Right.

CAFFERTY: He should be concerned about the deflation in the price of his book.

SERWER: Yes, this is really funny. Greenspan's book, "Maestro," on amazon.com, the price is falling. You could get one for 99 cents earlier this week. Today, it's going for 98 cents.

CAFFERTY: 98 cents?

SERWER: Yes.

CAFFERTY: Wow!

SERWER: So, deflation is a problem. It is.

CAFFERTY: And now, I understand the movie rights have not been sold as yet.

SERWER: Yes, that would be a sleeper, don't you think?

CAFFERTY: Yes, it would. Thanks, Andy.

SERWER: OK.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.





Economy?>