Fed Rate Cut
Posted by moonimus on Jan 22, 2008
The Federal Reserve just cut the federal funds rate on overnight loans from 4.25% to 3.5%! I can’t remember the last time there’s been a 3/4 point rate reduction since I started understanding how the Fed affects the overall economy.
Overall, this was a response by the Fed to the declining domestic and international markets. I haven’t checked yet but I’m sure all my retirement accounts have taken a beating. I’m not that worried as I’ve got at least 35 - 40 years before I start to tap into that money. If my daughter’s 529 plan is any indication, the market has been tanking badly since last June. I wish I had a nice windfall of money right now as I’d most likely buy into this declining market across the board…
This rate cut will probably affect me in two ways. First, the interest for my online savings account is sure to decline. I’m not too happy about that because for the first time in my life, I actually have a $1,000 in a savings account accruing at a decent 5.3% APY. Second, I’m going to make some calls to a few banks and see if I can get a better rate on the mortgage for my apartment. A friend told me that refinancing shares are much easier and cheaper than refinancing a mortgage. If I can reduce my interest rate by even half a point, that would be a big difference. I’ll post in the future the results of my calls.
