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Fed open to more cuts
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September 4, 2001: 7:44 a.m. ET
Published report: Officials see weak economy as justifying more rate action
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NEW YORK (CNNfn) - Policymakers at the Federal Reserve are prepared to continue cutting interest rates to try to spur the slowing U.S. economy, according to a published report.
The Wall Street Journal reported Tuesday that interviews with Fed officials at a conference last week found them open to the concept of continued cuts in the current environment.
The Federal Reserve announced its seventh interest rate cut of the year on Aug. 21 when it lowered the fed funds rate to 3.5 percent. It was the second straight quarter percentage point cut; the Fed had cut rates by a half point in its previous five cuts.
Prepared remarks at the conference did not give any indication of the Fed members' views on rate cuts.
But the paper said that Thomas Hoenig, president of the Kansas City Fed and one of those who voted against the half-point cut imposed in May, se seemed to have no objections to the quarter-point cuts imposed in recent meetings.
The Journal said Hoenig believes those more modest cuts are justified by continued uncertainty about the economy and the lack of any threat of inflation.
The paper said that Fed officials are concerned about recent signs that consumer confidence in the economy is falling. Consumer spending, which accounts for about two-thirds of the economy, has helped cushion the slowing economy in the face of cuts in business spending.
Click here for CNNfn special report: Fed Focus
David Horner, senior financial analyst at Merrill Lynch, told CNN's Ahead of the Curve on Tuesday that he believes the Fed will not only cut rates by a quarter-point at its next meeting in October, but that it'll probably cut rates a ninth time before the end of the year.
"We're in a low interest rate environment for some time to come now, even as the economy picks up," he said. 
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