>Why would they have expected to see *anything* before September? Long and
>variable lags are... long and variable.
For the real sector, yes. But quoting more of the story:
>First, when the Fed cuts rates, the value of the dollar usually
>falls, making U.S. exports cheaper for foreign buyers and thus
>stimulating U.S. production. But that hasn't happened this year. The
>dollar has kept rising, and exporters are furious.
>
>Second, lower rates usually give the stock market a boost, which can
>stimulate consumer spending as household wealth increases. But stock
>prices have remained stubbornly weak, particularly for high-tech
>companies whose share prices have plummeted from their speculative
>peaks of more than a year ago.
>
>Third, short-term rate reductions usually also bring down
>longer-term rates, which encourages businesses to invest more in new
>plants and equipment because it is less costly to borrow. But many
>companies have a large inventory of unsold goods, and high-tech
>manufacturing firms in particular have lots of excess production
>capacity because of the investment boom that ended last year.
>Companies in such straits are not likely to increase their capital
>spending simply because interest rates have fallen. Moreover,
>long-term rates have dropped only modestly so far.
So they were expecting a quicker financial sector reaction.
Doug