The Feds Cut Rates Again..What Does it Mean for Me???

This morning, the Federal Reserve unexpectedly announced it was cutting the federal funds rate that effects consumer loans as well as the discount rate effecting bank loans by three-quarters of a percentage point each. This is a bold move which shows that Fed Chairman Ben Bernanke is following through on his promise to take “substantive action in a timely and decisive manner” to keep this country out of a recession. > > Rate cuts typically stimulate economic growth over time by making it cheaper to borrow money for consumption or investment after banks follow the Fed’s lead and lower their prime lending rate for their best customers. > > The Fed has now lowered interest rates by 1.75 percentage points since Sept. 18. Today’s emergency interest-rate cut is the first since September 2001, and according to former Fed governor Lyle Gramley is the “kind of forceful leadership the markets had been hoping to see since the credit crisis hit in August.” > > “It pays to ask” and it also pays to tell. Pick up the phone, talk to your potential buyers and give them this encouraging news. > > >Jim Weichert