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Fed Overnight Rate Cut to 2.25%
By JD Bluefield | March 18, 2008
Today the Federal Reserve lowered the overnight bank lending rate by 3/4%, bringing it down to 2.25%. See the CNNMoney article here. The article states that economists have said this will further weaken the dollar and lead to increasing commodity prices. I agree. Looking at the CNNMoney chart below you can see how drastic these cuts have come.
What does this mean for you? Basically, these cuts are to allow the real estate spring to slowly unwind rather than pop. Millions of adjustable-rate mortgage will be given a stay of execution, but not a pardon. The dollar will most likely continue decreasing, making foreign goods and travel more expensive. Expect prices on food, gas and other necessities to also increase. Just looking at the charts, these are obviously desperate measure for desperate times.
Topics: Gold/Silver/Metals, Investing |
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