While consumers have shown slightly more spunk in recent weeks, most people aren't buying into the notion that all recession worries are behind us. But this year, buyers are backing off a bit. Maybe, it's the layoffs at automakers and auto suppliers. Yes, the Fed's action have made loans less costly. But businesses aren't in the borrowing mood when they're hearing recession chatter.
Consumers are edgy, too.
Yes, many people have taken advantage of lower mortgage rates to refinance their debt and take equity out of their homes. But refinancings are slowing as rates are moving upward. Mortgage rates fell significantly last year, as bond traders anticipated Fed action. But lately mortgage rates have inched higher, as bond traders have become more worried about inflation than the possibility of a recession. But he also sees the need for one or two more rate cuts ahead by the Federal Reserve to put the economy back on a firmer footing.