Federal Reserve
View PDF | Print View
by: marciafreeman
Total views: 76
Word Count: 366
The recent announcement of the federal reserve that it was planning to reduce interest rates from 1.5 percent to 1 percent inspired hopes that the economy of the United States would greatly benefit from the resulting increase in consumer spending, as well as the general confidence in the economy that was likely to follow. According to the Fed, this and other measures currently being implemented would result in a greatly improved economic climate that will in turn usher in a period of economic advancement.
This lowering of interest rates was actually long anticipated by many financial analysts, although most of them were unsure how low the interest rates would go. The federal funds rate was already lowered several times over the past year, with a half point decrease implemented only a few weeks ago. This decrease currently places the interest rate at the same levels as it was in the latter part of 2003 and the beginning of 2004. In contrast, the end of 2006 and the early part of 2007 saw interest rates soar as high as 5.25 percent.
In any case, borrowers all over the country welcome the lowering of interest rates. The Fed, however, is not actually responsible for setting the rates that are paid on mortgages, car loans, credit cards or other types of debt. Nevertheless, its actions do have an effect on how interest rates fluctuate. Mortgage rates for instance increase and decrease along with the bank rates of Fed, and are therefore in a better position to benefit from rate cuts implemented by the Fed. Recent decreases in interest rates could then mean a subsequent decrease in rates for people that apply for various types of home loans such as home equity credit packages, credit cards and adjustable rate mortgages.
One disadvantage to these decreases is that the interest rates on savings accounts, checking accounts and certificates of deposit will remain low as well. This is why it is important for consumers considering these accounts to compare the different banks rates. More Links Mortgage rate -- Mortgage -- Mortgage loans -- Mortgage loans -- Refinance rates --
About the Author
Read more on mortgage loans, link to www.getsmart.com.
Rating: Not yet rated