Feds Reduce Rate

The long awaited Fed decision arrived with a bang! The Fed surprised many economists and traders with a half percent cut in both the Fed Funds and Discount Rates. Stocks soared higher and enjoyed their largest gain since 2003.
What does the Fed cut mean? Rates on consumer debt, car loans, and Home Equity lines will all benefit. When the Feds funds rate goes down it doesn’t necessarily mean the 30 year fixed rate will follow. In recent weeks, as investors became convinced that the feds would lower the short term interest rate, 30 year fixed rates fell. Now they should remain low and perhaps go lower.
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