FORCEFUL FED CUTS INTEREST RATES

The Federal Reserve lowered the rate that Banks trade money by .50%. This reduction is intended to limit any damage done to our economy by the financial problems felt in past weeks/months. I must applaud the Fed for the .5% cut to Bank rates, as most real estate people expected a .25% redution.

What does this mean to consumers? Rates on consumer debt like car loans and home equity lines will benefit. Home loans will not feel relief as much because the cut was factored in a few weeks ago. This cut will hurt return on investments, like CDs. It also continues to weeken the dollar, making foreign goods more expensive. Inflation may nudge higher.