Joe Hinrichs, Ford's president of the Americas, remarked that vehicle sales growth in the United States may have moderated following an announcement by the Federal Reserve that it could begin unwinding its accommodative monetary policy. Hinrichs quipped that the auto industry was really strong in the first half of June, but may have "slowed a bit in the last week."
He said that Ford is monitoring whether worries over increasing interest rates are hurting consumer confidence. Auto lending in the US have grown at a faster pace as the market rebounds to a rate of over 15 million sales this year. The Fed's monetary policy has sent interest rates for new-car loans to record lows, supporting demand from US consumers seeking to buy new cars and trucks as replacement for their older models.
Federal Reserve Chairman Ben Bernanke announced last week that the agency may shrink the current $85 billion monthly bond-buying program later this year as well as stop purchases around mid-2014 if the US economy gains is consistent with Fed projections.
Terminating the stimulus program may take years to complete since most Fed officials said they are not expecting the benchmark lending rate to be raised from its lowest-ever range of zero to 0.25 percent until 2015.
According to Hinrichs, the Fed's announcement could have an effect on consumers. He said it will be interesting to watch where consumer confidence goes as the market "kind of fluctuated in the last week" and what higher interest rates mean for consumers' buying confidence." [source: Bloomberg]