3 Ways You Are Impacted by the Rate Cut

Banks with the subprime crisis and the housing slow down forced the feds to cut the benchmark interest rates from 5.25% to 2% in slightly over a year. 50 basis points in Sep 07, 25 in Oct, 25 in Dec, 75 in Jan 08, 50 points again in Jan, 75 points in March and 25 again in April. Most of this benefits the banks, brokerages and speculators who profited immensely from the subprime mortgages growth. You are impacted in three ways by this. 1. Every new dollar the Feds create results in decreased buying power, lowers your standard of living and threatens your retirement. Money is like any other commodity. The greater the supply of USD, the less it is worth.