Yesterday's news isn't the last we'll hear from the Fed regarding interest rates. Their two day regularly scheduled meeting is just next week, and another rate reduction may be announced by the time the meeting is adjourned. Rate cuts are being used to calm the markets and instill consumer confidence to keep us investing and spending. The three-quarter percentage cut yesterday and any future cuts could affect you in several ways. To see what they are please read more
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People seriously need to pay attention to what is happening in the financial sector in this country. If our economy is not adequately stimulated to offset the radically mounting inflation, we are going to see a major breakdown in the economy, resulting in loss of jobs and a great plummett in the value of the dollar. This giant cut in the interest rate by the Fed is not doing anything, especially when you look at the steep drop that the markets took right after the cut.
1I just hope that we can turn around the economy before we have a serious recession.
Our problem is stemming from a few years ago with those amazing interest rates. The problem though is that its affecting more then just the banks who lent too much money, its affecting people. Our economy depends too much on the likes of people for spending, not businesses. We also aren't buying things where the profit from it comes back to our own economy. We are spending our money at places that aren't putting the money back into american workers. I have no problem with buying some items made from other countries, but we have an addiction to places like walmart who drive companies to make everything in china to make it cheaper.
2People need to understand that this is a "credit crisis" not just a subprime mortgage crisis -- our employers can't borrow money easily if the banks are losing money on bad loans, and maybe they will need to downsize. Some, like startups who are highly leveraged, might just go out of business as money for them dries up.
FYI -- my husband just called a major lender in CA to refinance our mortgage at a lower rate (as triggered by the Fed Reduction) and the line was so busy, that they recommended calling later. Everyone is refinancing, it seems!!
3is this emergency rate cut (75basis points cut) just a bandaid or a real fix to the credit crunch (crisis)? i think you are correct Savvy as far as seeing another rate cut next week too when the feds meet. crazy times!
4You forgot to mention THE DOWN SIDE of the rate cut... fueling more inflation! This is really a situation of being damed if you do and damed if you don't. We will have to face the consequences of our irresponsible spending at some point.
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