Voices

Federal Reserve’s surprise interest rate cut:

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The rate cut is “a loud and clear message. We all think it’s in the right direction and none too soon.”

--Jack Welch, chairman and chief executive of General Electric Co.

The Fed “could sense the shifting. The mood in business is bad. Profits are declining. The stock markets [were] getting close to panic.”

--Stephen Axilrod, an independent

consultant in New York and former Federal Reserve economist

“The Fed has been timely, and they sent a strong message with this cut: ‘We are aware of the state of the economy. We want to make it very clear that the word recession is not a word to be used in our vocabulary.’ ”

--Richard Fuld, chairman and chief executive

of brokerage Lehman Bros. Holdings

“One scenario is that they cut the [half-point] and watch the data. If they’re surprised by a very weak employment report on Friday, they’ll cut again.”

--Michael Materasso, who oversees $7.5 billion

at Fiduciary Trust Co. International

“Monetary policy works a little bit faster than the conventional wisdom. We saw things turn around quickly when they cut [rates] in 1998. The economy was beginning to slow down then, and it took off like a rocket ship after they cut rates in the fall of 1998.”

--Paul Kasriel, senior U.S. economist at Northern Trust Corp.

“I would rather the cut had been 25 basis points rather than 50. I’m nervous about what they know and we don’t” about the economy’s slide.

--Andrew Abrams, who manages $200 million

at hedge fund CWH Associates

“We today have a much better chance of avoiding a recession.”

--Lynn Reaser, chief economist at

Banc of America Capital Management

“Expect a hard landing. The world is about to be treated to a U.S. version of Japan’s last decade.”

--Colin Negrych, manager of the Centaur Fund in New York

“To have an impact, the Fed needs to pull off surprises like this.”

--Steve Roach, chief economist at Morgan Stanley Dean Witter

“The rally in Treasury notes and bonds is 100% over, and a large chunk of the rally in high-grade municipals is about 75% to 80% over.”

--David Kotok, president of

money manager Cumberland Advisors

“What’s most relevant is that it will change the psychology of the market.”

--Paul Bialek, chief financial officer

of Internet software maker RealNetworks Inc.

“I basically believe that the funding spigot isn’t going to open like it was last year, but it will open. Fear will not be ruling; rationality will be ruling. And we’ve clearly been in a fear mode.”

--George Zachary, a partner at Mohr, Davidow Ventures

“The medicine was applied where it needed to be: in lower interest rates, not a tax cut.”

--Rick Hirsch, president of Sogemin Metals

“It isn’t good news that’s triggering this; it’s recession-oriented news. The world has the potential to be in an in-sync recession.”

--Frederick Taylor, chief investment officer of U.S. Trust, the money management arm of Charles Schwab Corp.

Source: Bloomberg News Gary Friedman / Los Angeles Times