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90-one per cent of firms say their spending plans would not change if the Fed successfully lowered their interest rates by 1 percentage point, according to a Duke University/CFO.com survey.80-four per cent say a 2 per cent rate reduction would not affect their spending plans, the survey found.
“I think the Fed has pretty much pulled all the levers that it can,” Greg Bubp, CFO at Eclipse, a manufacturer of industrial heating products based in Rockford, Illinois, told CFO.com.
What will it take for CFOs to commit to greater hiring and capital spending numbers? “I would say Europe getting its act together as well as Congress doing something to set a direction in terms of fiscal policy,” says Bubp.
Last week, CFO.com published a survey of 213 senior finance executives showing just 8% are certain they will increase full-time employment in 2013; 51% said it was likely.
“This is stark evidence that QE3 would be a wasted effort,” said Campbell Harvey, a finance
professor at Duke’s Fuqua School of Business and founding director of the survey. “The
CFOs are saying that it is naïve for the Fed to think that dropping interest rates will spur
investment in current economic conditions. I certainly hope the Fed gets the message for
their Sept. 13 meeting.” He called it “amazing that all the focus is on interest rates.”
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