SOUTH BEND — Investors say there is new evidence that local consumers may be tightening their purse strings — spending less on big ticket and luxury items amid fears of an impending recession.

With the economy struggling, the Federal Reserve slashed interest rates Tuesday to 3.5 percent, the largest cut margin in nearly a quarter century. It's the latest move from Washington aimed at heading off a recession.

Some say there are already signs that it may be too little, too late, and those signs are coming from local consumers who are worried about spending money they soon might not have.

Some businesses are starting to feel the pinch, too.

Mishawaka dentist Jeffrey Turner is one of them. His appointment book has stayed fairly full, but he's seen a big reduction in the amount of work being done per patient since late fall.

"We have seen a definite drop off in elective cases as well as cases that should be followed through with quite soon," he said.

In many cases, patients are pushing routine procedures like fillings back, or having work performed on their children's teeth, but neglecting their own.

It's the biggest slowdown he's seen in his 18-year practice.

The reason?

Rising credit card balances, and soaring costs on food and fuel.

"They're putting it off," Dr. Turner said. "[They're] trying to get the necessary funds to make the decision to do it."

Turner's practice isn't alone.

Just up the road at Granger Cleaners the problem is identical. Regular customers are still walking through the door, but their arms aren't quite as full.

"[They're bringing in] less clothes," said the store's manager Nohemi Sanchez. "This year is more low than last year."

Across the area, there are new worries about what might happen next if consumer spending continues to slow. It's one big reason the Federal Reserve took drastic action Tuesday, cutting interest rates out of session for the first time since 9/11, to help lower how much people pay on credit card debt, home equity lines of credit and auto loans.

It's a sign to some consumers that tougher times may lie ahead.

"What they're trying to do is inject some money into the system, relieve the credit burden on borrowers, and restore some confidence to the markets," said South Bend's Wachovia Securities Vice President for Investments Edward Jordanich.

Still, one person's loss, may be another's gain.

Many local auto dealerships are reporting fewer people walking in the doors. But in most cases, sales are actually up, because of dramatic price cuts on new and used cars.

Experts say it's more proof that consumers can help ensure a quick rebound.

"There's always money to be made somewhere," said Jordanich. "They should not panic. They should take a look at their situation, look toward the future and say, 'We have been through this before, and we can come out of this.'"

Still, investors are quick to point out that rebound won't happen overnight, no matter what consumers do.

That's why many are calling for quick action from Congress on some sort of economic stimulus package. They've also called for another interest rate cut from the Fed during their regularly scheduled meeting next week.

It's a gamble, because experts say every rate cut decreases the value of the dollar, and reduces values in some long term investments like certificates of deposit and money market funds. Some people use those funds to help plan for retirement.

But some on Wall Street worry, if deeper cuts don't lie ahead, reduced values and a weak dollar may be the least of consumers' worries.