DETROIT (AP) -- Two of Detroit's automakers welcomed the Federal Reserve's 0.5 percent cut in the target fed funds rate on Wednesday, but officials from General Motors Corp. and Ford Motor Co. said the lack of available credit and shattered consumer confidence are still weighing on auto sales.
George Pipas, Ford's top sales analyst, said the Fed has cut rates during the past year, dropping from 5.25 percent to the current 1.5 percent. But U.S. auto sales in that period have continued to decline, with September's monthly rate dropping below 1 million for the first time in 15 years.
Sales have dropped as consumer confidence was shaken due to uncertainty in the financial markets, declining home values, and lack of available credit.
"I think we can conclude by that that the die has been cast for the near term," Pipas said. "In other words, for the next several months, it's going to be tough sledding."
General Motors Corp. spokesman John McDonald said the nation's largest automaker welcomes any action by the Fed and other central banks globally to reduce financing costs and boost consumer confidence.
Yet tight credit markets that have knocked buyers out of deals are still cutting into sales, he said.
"Getting those credit markets moving again is critical to economic recovery," he said.
Pipas said the global financial market turmoil has made people reluctant to make major purchases such as cars and homes.
"It's not just the supply of loans, it's the demand for loans," he said. "Many people who have bulletproof credit are reluctant to pull the trigger on a significant purchase because of the uncertainty around the question of which way the world's economy is headed."
In a rare coordinated move, the Federal Reserve and other major central banks from around the world slashed interest rates Wednesday to prevent a mushrooming financial crisis from becoming a global economic meltdown.
The Fed reduced its key rate from 2 percent to 1.5 percent. It was joined in the half-point cut by the European Central Bank, Bank of England, The Bank of Canada, the Swedish Riksbank and the Swiss National Bank.
The Fed's action Wednesday was the latest in a long series of moves over the last several weeks that the central bank has taken in coordination with other federal agencies, Congress and the White House to shore up a financial industry stung by bad loans, mounting losses and -- in some cases -- collapse. President Bush signed a $700 billion financial bailout bill into law on Friday.
The Fed's action reversed its current policy on interest rates, which had been to hold them steady out of concern that more cuts would fuel inflation. Since Fed Chairman Ben Bernanke and his colleagues put a stop to interest-rate cuts in June, economic and financial conditions have deteriorated significantly.