Tuesday, January 22, 2008

Fed Slashes Rates

The Federal Reserve Tuesday morning slashed a key lending rate by 75 basis points in an attempt to prevent a recession and jump start the economy. The Federal funds rate-the rate banks charge each other for overnight loans- is now 3.50%. For savers CD rates will plunge but car shoppers and Home Equity Line of Credit customers will benefit immediately. The affect on 30 year mortgage rates and the recent credit tightening is unclear at the moment. The move caught a few people by surprise although world stock markets crashed Monday while US markets were closed for the Martin Luther King Jr. holiday.

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