At their regular scheduled meeting today the Federal Reserve made another 1/2 point cut. The market reacted by jumping 200 points only to fall back down.
The Fed also made it clear that they will continue to make cuts in order to stimulate the economy. This cut follows the surprise 3/4% cut that just happened.
Dual edged sword here, the cuts will mean that anyone with a rate pegged to the Prime Rate will see lowered interest payments (nearly all credit cards). Mortgages and refinancing should go lower, although they are balanced out a bit by demand as well as how fast the Treasury Ten-Year drops.
The downside is that 4 is the new 5...Until rates go up we won't see a lot of 5% Savings deals, unless it is a lockup or new customer offer. Also CD offers will continue to go down.
Basically the government wants us all to spend our way out of the upcoming (or here) recession! For our personal financial needs we are going to do what we can to get our FICO score to 720 and refinance...How about you? Are you looking at refinancing or buying longer CDs to lock in rates?
(photo by AP)