Return to Transcripts main page

CNN Live At Daybreak

Wall Streets Anxiously Awaits Fed Meeting

Aired August 20, 2001 - 08:14   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.
KYRA PHILLIPS, CNN ANCHOR: Nervous Wall Street waits to see whether the Federal Reserve comes to the rescue yet again. It meets tomorrow, and there is talk of another interest rate reduction.

Michael Sivy, editor-at-large of "Money" magazine is in New York.

What do you think, Michael? The Fed will probably cut those interest rates, huh?

MICHAEL SIVY, "MONEY" MAGAZINE: The expectation is that the Fed will cut rates and that it most probably will be a quarter-point cut. There are a few people, who think they might go as far as half a point.

PHILLIPS: Michael, why are so many companies coming out with these negative numbers?

SIVY: Well, we're in a slump. I mean, we have been in a slump, really, all year. It's not kind of a screaming recession by historical standards, but it's clearly a downturn. And a lot of companies are having their profits hurt by it.

You know, I think investors are overreacting to it a little bit in the sense that this downturn is really quite moderate by historical standards. It's not the kind of thing we had in the 70s or the early 80s. And it's just that everybody has gotten so used to having a perfect economy that even a moderate downturn is like freaking everyone out.

PHILLIPS: That's true. Why do you think we haven't hit bottom yet? Because everybody has sort of expected a big turnaround by now.

SIVY: That's right. I think investors are kind of disappointed that we haven't seen the economy turn up yet. So far, April was still the bottom for the stock market. We are retesting those lows, but we haven't quite gone down all the way yet.

I think it's entirely possible that we may not go through those lows -- that April may turn out to have been the bottom. And, you know, it would still be within normal parameters if the economy turned up say by October. So we're not -- we're still in a moderate recession. It's not a catastrophe yet.

PHILLIPS: That's true. Keeping an eye on that manufacturing sector. It is coming up a little bit.

Michael Sivy, "Money" magazine, thanks so much.

SIVY: 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.