What will happen to interest rates as the economy recovers?

About 45 minutes ago, the US Federal Reserve announced that its federal funds rate — which is the rate that banks charge each other for loans — will remain at the same low 2% it has been at for the past three months.
For people with cash investments (savings accounts, CDs, money market and the like), this is a bit of a bummer. On the other hand, people with consumer debt have something to cheer about: With interest rates remaining low, more of your credit card and home equity line of credit payments will go toward reducing your principal.
If you are …read more

The Federal Reserve is expected to make another interest rate cut today. And I can’t say that I’m overly enthusiastic about it. The announcement is supposed to come at 2:15 eastern, so that’s still three hours away. I have all sorts of time to consider.
My main issue is inflation right now. Food prices inflation and gas prices are issues in terms of household budget. And other inflation could rise as well. That’s what happens when interest rate cuts like this are made.
Stocks
On the plus side, stocks are up in anticipation of seeing the benchmark rate at a low 2%. So …read more

Yesterday saw an emergency Fed rate cut meant to help the economy. Whether it kicks start the economy or not, there are plenty of people who will see impacts in their personal finances from this move. Yahoo! Finance describes some of the areas that will benefit from yesterday’s Fed rate cut:
After the Fed’s rate cut Tuesday, banks quickly cut their prime rate — the rate they charge their best customers — to 6.5 percent. The prime rate also serves as a benchmark for credit cards and home equity loans, and those borrowers will benefit from lower rates.
Others to benefit include …read more