This week the Federal Open Market Committee reduced the federal funds rate by half of a percentage point. This key interest rate affects many facets of the economy and some effects can be seen in your own finances.
The federal funds rate is often used as a key factor in determining interest rates on everything from checking and savings accounts, to mortgage and credit card rates. This first rate cut in over four years could be the start of continuing cuts through the end of the year. This is a good time to begin watching your credit card interest rates to see if they drop, and if not, possibly look to transfer the balance to a card that is tied to the federal funds or prime rate, as well as examine the rates on your savings accounts or CDs.
The federal funds rate is often used as a key factor in determining interest rates on everything from checking and savings accounts, to mortgage and credit card rates. This first rate cut in over four years could be the start of continuing cuts through the end of the year. This is a good time to begin watching your credit card interest rates to see if they drop, and if not, possibly look to transfer the balance to a card that is tied to the federal funds or prime rate, as well as examine the rates on your savings accounts or CDs.
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