The Fed Rate Cut and What it Means
January 22, 2008
The Fed made a significant move today with an emergency Federal Funds rate cut of 75 basis points. The move was made after global financial markets sold off in dramatic fashion and the Dow Jones industrial average opened today down 450 points.
It appears that finally the Fed is taking significant action to prevent dropping into a formidable recession. There is also talk out on the street that the Fed might take another 25 to 50 basis point cut at the end of the month during their formal meeting.
The big question is what effect does the lowering of the funds rate have on consumers? Specifically, how does it affect items such as mortgage interest rates, real estate in the Tri-Valley, the ability to borrow money, consumer spending, etc. I found an article that clearly breaks down the impacts of the rate cut by the Fed.
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