This economy is not doing well, and it's enough to make the Federal Reserve decide to keep cutting rates. The economy is expecting it, so to some extent it won't react. Also, what the Federal Reserve does now will not affect the economy until the fourth quarter of 2001. The main problem is consumer confidence. This is the biggest drop in consumer confidence since the 1990 recession.
People are scared, and when they get scared they stop spending.
There was a sharp drop in car purchases in the fourth quarter of 2000. Real estate was less of an issue. With mortgage rates back down to 7 percent, it balances some of the loss of confidence. We'll have a severe slowdown but not a recession. Manufacturing has been going down for a year because our goods are not selling overseas.