Fed Chair Ben Bernanke Prepared to Cut Interest Rates if Necessary
Will the Fed cut interest rates? That is the question on many minds right now, and one that could affect you in your quest to build wealth. Inman News is reporting that the Fed may cut interest rates:
Expectations that the Federal Reserve will cut the federal funds rate this year rose Tuesday after Sen. Chris Dodd said Fed Chairman Ben Bernanke is “prepared to use all the available tools at his disposal” to keep money flowing to mortgage lenders.
And what does this mean in terms of your life? Well, if the Fed does cut interest rates (and some think this rate cut could be as early as next month), it means that your mortgage loan rate could fall. But only if you have a variable rate, or if you are buying a home or refinancing. Also, the increased liquidity would make it easier to get a subprime loan.
For the investor, lower rates generally mean that the stock market goes up. Lower rates decrease borrowing costs for companies on the stock market, and that is good for the bottom line, and for stock values. In the forex trading world, it could mean a lower U.S. dollar, but at the same time, investing in other currencies would be the thing to do. Safer investments, though, like cash and bond yields, would decrease with lower interest rates.
Interest rates play a large role in our economy. And while they aren’t the be all and end all, they can offer you some insight into what your next move should be when making a financial plan.
Tags: build-wealth, easier-subprime-loan, Fed-chair-Ben-Bernanke, Fed-cut-interest-rates, Fed-rate-cut, lower-interest-rates, personal finance blogRelated Stories
POSTED IN: Investing, Mortgage and Loans
1 opinion for Fed Chair Ben Bernanke Prepared to Cut Interest Rates if Necessary
Will the Fed Cut Interest Rates? - Banks.com Mortgage Blog
Aug 22, 2007 at 10:28 am
[…] interest rates don’t control everything about the economy, interest rates are significant players in how well the economy does. Especially in terms of home mortgage […]
Have an opinion? Leave a comment: