Are You Ready for Another Rate Cut?

Experts are divided as to whether or not the Federal Reserve Board will cut rates again this Wednesday. Another quarter point cut would leave the Fed Rate at 2.00%. This would be the lowest fed rate since November 2004, around the same time when the U.S. homeownership rate peaked at 69.2 percent.

What would another rate drop mean to you? Well for one thing, your high-yield savings account is going to take another APY hit. Currently, an ING savings account earns a pretty lowly 3%. If you're a saver, like me, this isn't happy news.

On the positive side: You should be able to get a great low rate on an auto loan. Plus, auto dealers are struggling with a slowdown in new car sales, meaning that they could be eager to make you a deal.  And home equity loan rates would be stellar if you could find someone to give you one. The stock market would also probably benefit from a rate cut and you could see your credit card APR drop a bit.

On the negative side: Another rate drop could play a role in an even weaker dollar and even more inflation on food and gas prices. And mortgage rates? They're not playing along with the Fed. Rates for a 30-year mortgage have been pretty steady and didn't drop with the Fed cut in March.

Do you think the Federal Reserve Board is going to cut rates again? Do you think they should cut rates or leave them alone? Share your feedback in the comments section below.

Emily Davidson – A former TransUnion insider and a member of Credit.com's expert team. Emily writes about credit reports, credit cards, loans and personal finance as the CreditBloggers.com editor.

Comments

[Jim ~ mydebtblog.com]

I think he needs to stop cutting the rates for the sake of inflation. Oil and food are rising in price very quickly. If he stops messing with the rates I think the rapidly rising cost of oil would stop.

[Business Credit Builder]

I'm glad the fed cut rates one more time; I know it's rough on consumers, but it is good for business. eventually commodities are going to hit a ceiling, and signs of inflation appear to be minimal. I expect that if the fed holds rates for the next to fed meetings, we'll start to see the dollar rally, and this ridiculous commodities bubble will finally burst