Fed Passes on Rate Increase for Second Time

Situation

• W/ only 1 dissenting vote, Fed declines for 2nd time to raise rates
  
• Follow-up statement indicated would maintain rates at next meeting as well
  
• Suggested that inflation risk easing due to housing downturn, retreating energy prices
  
• Bernanke view that slowing economy will damp inflation at odds w/ some economists
  
• Latter experts say continuing strong consumer demand may lead to increased prices
  
• Dissenting Fed policy maker, Jeffrey Lacker, favored quarter point raise
  

Significant Points

• Next meeting in late Oct, just before midterm elections
  
• Stock market buoyed by Fed decision, Dow Jones closed just below record high
  
• Economic adviser, Albert Wojnilower: continued strong consumer spending fueling "creeping inflation"
  
• Fed acknowledged risk, said future actions would depend on "evolution of the outlook for both inflation and economic growth"
  
• Fed statement omitted any reference to effect of rising labor costs
  
• Moody's Economy.com chief economist considers omission significant

Read QuotesClick Here for Full Digest and Source Article:
http://www.automotivedigest.com/view_art.asp?articlesID=20282

Sourced From: The New York Times, September 21,2006

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Auto Buyers Boning Up on Financing Options

Auto Buyers Boning Up on Financing Options

Situation:
New survey by AWARE shows consumers more savvy about auto financing
Found 83% of Americans aware of options, 58% feel informed about financing
67% plan to do more research before next purchase, 54% will check credit scores
64% will compare interest rates, 70% plan to negotiate financing
41% prefer Internet as info source

• Significant Points:
  AWARE is collaborative industry effort to educate consumers about auto financing
  
• Primary initiative is website--http://www.autofinancing101.org/
  
• No ads or lead generation sales tactics on website
  
• Survey found 71% want more info from vehicle financing industry
  
• Especially African Americans (83%), consumers between ages 18-24 (86%)
  
• 47% ranked negotiating rates 1st, 42% finding good rates 2nd for more information Read Quotes
• Click Here for Full Digest and Source Article:
  http://www.automotivedigest.com/view_art.asp?articlesID=20117
  Sourced From: The Auto Channel, September 5, 2006

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