FED CUT ?

Gnutrade is all interesting. Its a new Financial Game

For the first time in more than four years, the Federal Reserve appears ready to lower interest rates to prevent a housing meltdown and a painful credit crunch from driving the economy into a recession. A rate cut would affect millions of borrowers, with the intention of getting them to spend and invest more, which would revitalize the economy.

If the Fed drops the rate, then the prime lending rate that commercial banks charge many individuals and businesses would fall by a corresponding amount. It now is at 8.25%.

Fed action would mean that borrowers who can obtain credit would see rates drop on a variety of loans. It would become less expensive for people to finance certain credit card debt and for homeowners to take out popular home equity lines of credit, which often are used to pay for education, home improvements or medical bills. But finally, the Federal Reserve cut its key lending rate Tuesday for a third time in a row and signaled that it is sufficiently worried about a financial freeze-up that it may be willing to make further cuts.

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