Investors appear certain that Ben Bernanke will cut interest rates by some amount Tuesday. What will that rate relief do for you: the consumer?
CNBC Senior Economic Reporter Steve Liesman joins the panel to discuss the implications for the consumer side of the economy. Here are excerpts from what was said.
Can The Fed influence the consumer in a meaningful way?
I think The Fed will be able to influence consumer spending, says Liesman. I think there are a lot of consumer rates that are tied to LIBOR. However I think as housing prices decline or fail to rise – consumers will consume less. But, I don’t foresee a recession, Liesman says. What I see is the aftermath of a housing bubble.
Is there a correlation between the performance of retail stocks and interest rates?
Yes, replies Jeff Macke. He reminds Dylan Ratigan that evidence the consumer is dead of often wildly overstated.
Should investors own retail ahead of the Fed announcement?
Karen Finerman says, "Yes!" because historically, she feels the sector performs well after a rate cut. Finerman is specifically looking to buy Target (TGT).
Jeff Macke agrees but feels there’s plenty of time to accumulate a position in retail. He also likes Target as well as Macy’s (M).
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Trader disclosure: On Sept. 17, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (EMC); Najarian Owns (VMW); Najarian Is Short (ETFC); Najarian Owns (GS) Options: Finerman's Firm Owns (TXI), (WMT), (TGT), (COP); Finerman's Firm Owns S&P 500 Puts; Finerman's Firm Owns Russell 2000 Puts; GE Is The Parent Company Of CNBC