Fed to Cut Interest Rates Again

For the 10th time since September 2007, the Federal Reserve is set to decrease their interest rates. I can’t believe they are actually going to do it again. Currently at 1%, as early as next week we could be seeing .5% or even .25% interest on the funds our government is borrowing. That is good news for the auto makers who are begging for their “bailout” desperately trying to save their industry. Another benefit to our economy is when interest drops it leads banks to drop their prime rates, which influences the rates on your credit cards, home equity lines of credit and other personal/business loans.

However, does dropping the rate really boost the economy? Not really. All it does is stop the bleeding from getting much worse than it already is and try to stimulate government spending. Gotta spend money to make money, right? Dropping the rate in which our money is “loaned” to us doesn’t really stimulate the economy on the “Main Street” level. But if everyone keeps walking up with their hands out waiting for the government to help them fix their poor choices, at least their money will be cheaper to get from the Fed.

Tags: auto makers, bailout, bank rates, boost economy, business loan, credit card rates, cut, decrease, Fed, federal reserve, government borrowing, government spending, home equity line of credit, home equity loan, interest rates, personal loan, prime rates, september 2007, stimulate, stimulus