09.18.07 | The Federal Reserve Rate Cut - and You
As of now, the predictions are that the meeting of the Federal Reserve Board will agree on reducing a key interest rate by a quarter to a half a point. In a nutshell, they are doing this primarily to slow the decline of the housing market. This is due to slowly escalating interest rates as well as the thousands of mortgages whose rates are variable (not fixed) and are beginning to adjust to the new rate, which can create much larger monthly payments. Definitely a potential problem for a lot of people. If you aren’t familiar with mortgages, consider if your landlord increased your rent by 10-20% for absolutely no reason. Not fun.
This rate cut will most likely affect other important rates as well. Student credit card APR and interest rates may decrease as may student loan rates. These are both good things. However, other rates that may decline are savings accounts, which is not so good. Can’t win them all, but I think the positives outweigh the negatives here.
Read more info on the rate cut: http://www.iht.com/articles/ap/2007/09/18/business/NA-FIN-ECO-US-Interest-Rates.php
