Fed's Santomero says recent confidence drop more severe than data indicated

NEW YORK (AFX) - Anthony Santomero, the president of the Philadelphia Federal Reserve Bank, said the Federal Open Market Committee recent rate cuts have been designed to shore up consumer confidence that has been "more severe than the underlying data seemed to indicate.	    In a speech prepared for delivery to the Downtown Economists Club, Santomero said Fed monetary policy cannot always respond when consumer confidence falls, but should take action "if a decline in confidence is viewed as having a substantial dampening effect on overall real sector demand growth."	    "I believe the Fed's recent policy actions are consistent with this approach. It responded to a variety of indications that aggregate demand growth has been weakening, including a deterioration in confidence that was more severe than the underlying data seemed to indicate," Santomero said.	    "Sometimes monetary policy decisions have to be based on something more that well-constructed theory and overwhelming evidence from the data. Sometimes they must be based on our sense of the situation," Santomero said.	    "Such situations do not arise very often, but when they do, it is important, given the lags in the impact of monetary policy, that the Fed move expeditiously," he added. 

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