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Politics & ReligionWell Since every damn forum has one. Might as well leave it out there. This place is loosely moderated and should not be entered if you're weak of heart.
depends what happens...........if we hit the magic 5% then they suspend trading.
The Dow would have to fall 604.965 for that to happen............
Still is a bad sign that the recession has started...... now we just have to see what foreign investers do. If they start bailing on t-bills then there might be a major correction.
Hopefully this question is kinda on topic.....So the fed cut the overnight lending rate by .75% today. But what does that really mean for the everday consumer? Does this somehow directly change mortgage rates, auto loan rates, small business loans or anthing that we can easily find useful?
Since I'm assuming that the rate cut doesn't directly affect mortgage rates, then what does? What other factors go into figuing the mortgage rates?
My understanding is the Fed cut could actually lead to a rise in consumer rates for the short term. Makes me nervous as I'm in the process of buying a house and its certainly a volatile period.
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Quote:
Originally Posted by Justin726
Hopefully this question is kinda on topic.....So the fed cut the overnight lending rate by .75% today. But what does that really mean for the everday consumer? Does this somehow directly change mortgage rates, auto loan rates, small business loans or anthing that we can easily find useful?
Since I'm assuming that the rate cut doesn't directly affect mortgage rates, then what does? What other factors go into figuing the mortgage rates?
Raising the Federal funds rate will dissuade banks from taking out such inter-bank loans, which in turn will make cash that much harder to procure. Conversely, dropping the interest rates will encourage banks to borrow money and therefore invest more freely.[3] Thus this interest rate acts as a regulatory tool to control how freely the US economy, and by consequence world economy, operates.
Just remember that recessions are cyclical. It's inherent with the business cycle. By trying to use monetary policy to prevent a recession (in theory), you're going to be delaying a much larger and more devastating (and perhaps longer lasting) effect on the economy.
Read some stuff from Milton Friedman. It'll blow your mind.
Hopefully this question is kinda on topic.....So the fed cut the overnight lending rate by .75% today. But what does that really mean for the everday consumer? Does this somehow directly change mortgage rates, auto loan rates, small business loans or anthing that we can easily find useful?
Since I'm assuming that the rate cut doesn't directly affect mortgage rates, then what does? What other factors go into figuing the mortgage rates?
It makes money cheaper. While it is not directly related to mortgage rates, it will help pull them down. There will just be a lag.
What can you expect when our economy is based on credit and spending? We have gutted our industrial capacity and the jobs in the industrial production sector. If you want to survive, get away from debt as quickly as you can. Our family has used one income to pay the bills and the other to pay down debt. We have paid off our home mortgage and will be completely debt free by June 2008. The worst is yet to come
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Financial markets dropping rapidly
