As most people are aware by now, the Fed, in a very wise move, decided to drop interest rates. As good as this news is I want people to understand that it DOES NOT mean that your interest rate will drop by the amount that it was lowered or even any at all. The Federal Reserve said it lowered short-term interest rates by half a percentage point, to 4.75%, to combat the effects of a weaker housing market and tighter credit on the broader economy. The steep reduction in the Fed funds rate surprised many on Wall Street who expected a more modest rate cut. Stocks rose sharply after the Fed's announcement, with the Dow Jones Industrial Average gaining 335.97 points, or 2.5%, to 13739.39.
If you look above I posted a picture on how the rate change may affect you. This is a great step to help stabalize the housing market. Only time will tell if it is enough!!
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