The Federal Reserve Board cuts interest rates again, now down to 3.5% from 4.25%, in a rare move outside the normal meeting schedule. The reduction is meant to stimulate growth as banks will lower their loan rates for certain kinds of loans. Here’s how things will go for the consumer:
– Savings yields on things like money market accounts, online savings accounts, and certificates of deposit will drop.
– APR on credit cards with variable interest tied to the prime rate will drop.
– Banks will cut their loan rates, creating an opportunity to negotiate your higher interest loans into lower ones.