The Federal Reserve lowered the Fed funds rate (what banks charge each other) by .25 today. That will bring it down to 4.25%. In response, many of the major banks dropped the prime rate to 7.25% which will make homeowners who have HELOC (Home Equity Loans) a little happier.
The Discount rate (what the Fed charges banks for loans) was also lowered, this time by .25% to 4.75%.
It is my opinion that the Fed will have to continue to lower rates for the forseeable future in order to keep our economy moving. Our dollar should start to get stronger in the second quarter of 2008.
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