The Fed Cuts Rates a Quarter Point
October 31, 2007
The Fed voted to lower the fed funds rate a quarter point to 4.50% today with one dissenting vote. The rate cut, which follows a 50 point cut in September, will effectively lower the prime lending rate in the United States to 7.50%. Loan payments, mortgages, and credit cards which are indexed to the prime rate have been relieved of a total of 75 points or 9% of the total financing charge prior to Septemnber, a considerate gift to the strapped American consumer.
Banks and financial services firms are the other major beneficiary of today's rate cut as the spread between short and longer term rates has widened which increase profit margins for banks.
Check The Savings Investor tomorow for a complete list of updates rates on investment products and loan products including online bank deals.