Fed Policy 'Appropriate' Now: Caterpillar CEO

Count Caterpillar's chief executive among those happy the Federal Reserve won't raise interest rates until late 2014.

**FILE** Rows of heavy Caterpillar equipment sits ready for shipment at the Caterpillar plant in Decatur, Ill.,in this April 20, 2007 file photo. For American companies with operations that stretch overseas, the slumping dollar has become a fiscal life preserver amid slower domestic economic growth and waning sales. (AP Photo/Seth Perlman, file)
Seth Perlman

"The loose money policies of the Fed are very appropriate right now," Doug Oberhelman told CNBC Thursday. "Interest rates should be low. Money supply growth should be high."

He said many of Caterpillar's mining customers are telling him there's a lot of investment going on thanks to the Fed policy, which pushed the value of the dollar down and the price of commodities they're mining, such as oil and copper, higher. More business for its customers means more need for Caterpillar's equipment.

"This is the time to do it," he said of the Fed's policy. "We've encouraged the Fed and others to make sure we have a money supply that can get us through and buy some insurance...for risks around the world" that may unexpectedly arise.

He wonders about Europe. "Will the euro situation spill over? Will there be a policy mistake? Will that continue to spiral downwards?" he asked. "We don't think it will but that's certainly a risk everybody's talking about. We're a little more optimistic than most."

Earlier Thursday, Caterpillar reported quarterly profit up 58 percent and revenue up 41 percent from the same period in 2010 and raised its revenue outlook for 2012 to $68 billion to $72 billion.

"As we look across the world at the products and services we offer, things are strong," Oberhelman said. Although "nowhere near the 2008 peak," there's been a "revival of activity" in the U.S. as well as in Latin America and, to some degree, in China.

"Construction activity is not booming as it was in 2008 but we're definitely headed that way," he said. "We'll see better numbers in 2012."