Iowans Welcome Interest Rate Cut

F O R T    M A D I S O N, Iowa, March 20 -- They watched the Fed decision closely at the Lee County Bank in the Mississippi river town of Fort Madison.

And they were pleased when the announcement came that the Federal Reserve was cutting short-term interest rates by a half percentage point for the third time this year.

"It's definitely good news," said Dave Steffensmeier, an investment counselor at the bank. Steffensmeier hopes the interest rate cut will bring investors back into the market. "There's a lot of money sitting on the sidelines right now."

Local business owners hope the interest rate cut will loosen spending. "So much of our business — 90 percent of it — is people with payments and monthly budgets, and interest rates really play a factor in that," says car dealer Greg Schottenkirk.

Real estate agents also hope to benefit from the Fed's move, even though mortgages are not directly tied to the prime rate. "We'll take half a point and maybe in early June he can do another half a point," says Sharon Scholl, owner of Scholl Real Estate.

Hope for a Boost in Consumer Confidence

People in Fort Madison are talking about boosting consumer confidence. Some say neither the White House nor the news media have been very helpful to consumer confidence, with President Bush referring for weeks to a "sputtering" economy and journalists reporting every pessimistic comment from on high.

"I think if they would stop talking about the bad economy, then people aren't going to feel that we're having a bad economy," says Madeline Leak, owner of the Colony Shop, on Fort Madison's Main Street.

Pig farmer Mike Pieper, who had 3,000 sows to keep warm through the winter, complains that high energy prices have been killing his business. Pieper says that Greenspan is helping, but he looks to a higher authority to make a real difference: "An angel would be very nice. Things are pretty tough in the farm sector."