Fed Issues Major Rate Cut
Amidst talks of a $145 billion economic stimulus package that is designed to give the economy a “shot in the arm,” the Federal Reserve just cut short term interest rates by 0.75 percent. This drops the rate from 4.25% to 3.5%, meaning that the Fed has reduced rate by 1.75% since September. According to Bankrate.com, additional cuts are expected at next week’s regularly scheduled meeting.
Given that this move was made in response to recent turmoil in the stock market, it’s interesting to note that (as of this writing) the Dow is currently down 2.6%, the NASDAQ is down 3.1%, and the S&P 500 is down 2.75%.
Keep in mind that, regardless of what happens in the stock market, this move means that bank interest rates will be falling in the near future.
Published on January 22nd, 2008 - 4 Comments
Filed under: Economy
email this article
- add to tip'd - stumble it - digg it - bookmark it
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
Related articles...
» Refinancing Our Mortgage» Free Access to Consumer Reports (and More)
» Politics is Big Business
» Is WaMu on the Cusp of Failure?
» Tax Diversification When Investing
» Pre-Paid Legal Plans
» Standard Mileage Rate Increases for 2007
» Saving for College
Was this article useful? Please sign up to receive our content via e-mail:
Great deals...
Readers’ choice...
Recent articles...
- Did Congress Make the Homebuyer Tax Credit Retroactive?
- Congress Extends $8000 Homebuyer Tax Credit, Adds New $6500 Credit
- Lending Club Update - October 2009 Performance
- How Much to Budget for Car Maintenance?
- Series I Savings Bonds Now Paying 3.36%
- Use Weight Loss Strategies to Get Out of Debt
- Weekly Roundup - Disney Shanghai Edition
- How to Save Money on Vacations
- Most and Least Reliable Cars - 2009 Edition
- Get 100 Free Trades from OptionsHouse Brokerage
Recent comments...
- APRIL DAYS: I FOR ONE HOPE THAT THE FIRST TIME HOMEOWNERS TAX CREDIT IS EXTENDED BECAUSE...
- JB: I drive a 1999 car and save $60 a month for car repairs, oil...
- Greta: My significant other and I bought a house in February 2009. My boyfriend...
- Jay: Don't forget nCleaner 2nd for turning off widows firewall and windows defender...also use the...
- Bryan: @Doug - you said it... if you simply delayed the closing, it would have...
- Sympathetic Dish TSR: @ Bonnie: Is your HD tv a Flatscreen LCD style? If so then a...
- John DeFlumeri Jr: Thanks for explaining the tax credit. Too bad for those who purchase in...
- Hank: I always budget $100 a month for car repairs. I constantly find myself going...
Most talked about...
- Dave Ramsey is Bad at Math
- $8,000 Homebuyer Tax Credit
- Dish Network Customer Service SUCKS
- How to Claim the First-Time Homebuyer Tax Credit
- $15,000 Homebuyer Tax Credit
- Reduced Credit Limits? Share Your Experience
- Would the "Fair Tax" Gut the Economy?
- Tax Stimulus Rebate Payments to Start Early
- Pay Off Mortgage Early? Or Invest?
- The Best Online Savings Accounts (Updated!)
- Life's Too Short to Drink Cheap Beer
- $7500 First Time Homebuyer Tax Credit
Recent actions by our federal reserve suggestive of reassurance for our international friends, and to stoke domestic lending/borrowing. Same rules apply as always to us little people during these days of malaise – reduce debt load, dollar cost average into our diversified allocations, and stop adding new debt! Suggested reading in the interim: “The Crowd” by Gustave Le Bon (appropriate read for these “what’s the crowd doing?” days).
Comment by Ria Rhodes — Jan 22nd 2008 @ 5:46 pmI for one am glad to see these cuts if it will help the stock market. I still don’t think we’re out of the subprime mess. But these rate cuts will reassure the markets (domestic and international) as well as lower rates so some of these subprime folks will be able to refinance to a fixed rate that they can afford. But for us savers this is not good. Our money in the bank will be earning practically nothing – might not be a bad time to lock in some CD rates.
Comment by KC — Jan 22nd 2008 @ 9:23 pmBanks interests are falling now. My banker called me to postpone meeting because of the Fed’s cut.
I don’t wish to be a banker right now. Yet who knows… they will figure another way of “skinning” you. wait for for more fees on your investment accounts.
Comment by Nick — Jan 24th 2008 @ 7:11 amWill the stimulus check be garnished to offset student loans?
Comment by Jacquie — Feb 22nd 2008 @ 2:18 pm