Federal Reserve cuts interest rates

[CrimsonTider]

Excuse my lack of financial savvy, but will this help folks in credit card debt?

Nope

 

[inndaskKy]

There's a lot of sheep in this thread spewing neoliberal nonsense like they get paid to post it or maybe they actually believe it.

Wizard of Oz ass posters
Meanwhile, in the real world people are hurting while greed-is-good'ers keep filling their pockets and then pretend to be outraged when there's another mass shooting.

 

[ball15life]

Does anyone know the ratio of Fed cuts to commercial rate cuts? iirc it's not 1 to 1
So a half point Fed cut could mean avg commercial rates go from 6% to like 5% or something like that



Dow already up 300 points since the announcement

ChatGPT Answer:

The relationship between Federal Reserve (Fed) rate cuts and changes in commercial interest rates, such as those for mortgages and other loans, is not a simple 1-to-1 ratio. A half-point Fed rate cut doesn’t automatically translate into an equivalent reduction in mortgage or housing interest rates. Here’s why:

1. Transmission Mechanism: The Fed controls the federal funds rate, which is the rate banks charge each other for overnight loans. This rate affects short-term borrowing costs but indirectly influences longer-term rates, like mortgages. Mortgage rates are more closely tied to the yield on 10-year Treasury bonds than to the Fed funds rate. These bond yields fluctuate based on investor expectations about inflation, economic growth, and other factors.
2. Lag and Market Reaction: Mortgage lenders consider factors like inflation, credit risk, and economic conditions. After a Fed rate cut, banks may take time to adjust their commercial lending rates. Additionally, financial markets tend to anticipate Fed decisions, so mortgage rates may already reflect expectations of a Fed cut before it happens.
3. Magnitude of Change: Historically, a 0.5% (50 basis point) Fed rate cut might lead to mortgage rate reductions that are less than 0.5%. This is because lenders don’t pass on the full cut; the reduction is often smaller due to factors like profit margins, borrower demand, and risk assessments.
4. Consumer Rate Variability: Different types of loans are affected differently. Adjustable-rate mortgages (ARMs) and home equity lines of credit (HELOCs), which are tied more directly to short-term rates, will likely respond more to Fed cuts than fixed-rate mortgages.

Example:​

If the Fed cuts rates by 0.5%, mortgage rates might fall by 0.1% to 0.25%, depending on market conditions. However, if the economy is perceived to be weakening, mortgage rates could fall more sharply as investors seek the safety of long-term Treasury bonds, pushing yields (and mortgage rates) lower.

In summary, a half-point Fed cut would likely lead to some reduction in housing interest rates, but the impact may not be proportional or immediate.

 

[DeuceZ]

Savings APY gonna dip but it was good whilst it lasted

My job prolly gonna get busy as shyt with the lower rates

 

[the bossman]

They're not cutting rates, stop listening to bozos.

Hes not cutting shyt, im telling you. They been saying this for a year. People dont even know what cutting the rate would lead to.

holla at you next month

what's good fam

 

[Spence]

How will it help the job market?

I’m not sure this will make companies stray away from the path they currently on?

If it’s cheaper to borrow companies assume more risk. It also makes it easier to hire more staff for new projects if they are saving money on borrowing costs.

 

[I Really Mean It]

There's a lot of sheep in this thread spewing neoliberal nonsense like they get paid to post it or maybe they actually believe it.

Wizard of Oz ass posters
Meanwhile, in the real world people are hurting while greed-is-good'ers keep filling their pockets and then pretend to be outraged when there's another mass shooting.

 

[Piff Perkins]

The way Trumpism infects institutions is very interesting and dangerous. This is the first fed cut since March 2020. Economists have been arguing for a cut for months, if not longer. This should have been a unanimous vote for long overdue action, but one dissent now allows Trump and republicans to make this political. Will it work? Of course not. Most people, even most republicans, understand this is good news (including for their businesses). But it's just wild how there's always a judge or state official or lawyer willing to bow down to this freak and his circus.

Personally I think Trump is fukked but we'll see.

 

[Vandelay]

Politics is really team sports and personality traits now.

 

[Lord Beasley]

More proof that conservatives don't give a fukk about us

 

[Peter Popoff]

a lot of new liquidity will be entering the market, since borrowing is less expensive.

the market will go on a bull run soon.

Which means lots of bull-ish candlesticks. Time to buy up (buyers market) in futures .

 

[Elim Garak]

They will probably say it's fake lol.

 

[RickyDiBiase]

There's a lot of sheep in this thread spewing neoliberal nonsense like they get paid to post it or maybe they actually believe it.

Wizard of Oz ass posters
Meanwhile, in the real world people are hurting while greed-is-good'ers keep filling their pockets and then pretend to be outraged when there's another mass shooting.

If you broke nikka just save it for the fat bytch who cares.

 

[Loose]

Excuse my lack of financial savvy, but will this help folks in credit card debt?

Yes any and all borrowings, which includes car insurance rates

 

[Saysumthinfunnymike]

High yield savings will go down but I got my shyt locked in for now