History Of Fed Rate Cuts

                                                Cut       Discount Rate   Fed Fund Rate

01-03-01 Fed cuts Interest Rates 0.50%  6.00%                  5.75% 

01-04-01 Fed cuts Interest Rates 0.25%  5.75%                  5.50% 

01-31-01 Fed cuts Interest Rates 0.50%  5.50%                  5.00% 

03-20-01 Fed cuts Interest Rates 0.50%  5.00%                  4.50% 

04-18-01 Fed cuts Interest Rates 0.50%  4.50%                  4.00% 

05-15-01 Fed cuts Interest Rates 0.50%  4.00%                  3.50% 

06-27-01 Fed cuts Interest Rates 0.25%  3.75%                  3.25% 

08-21-01 Fed cuts Interest Rates 0.25%  3.50%                  3.00% 

09-17-01 Fed cuts Interest Rates 0.50%  3.00%                  2.50% 

10-02-01 Fed cuts Interest Rates 0.50%  2.50%                  2.00% 

11-06-01 Fed cuts Interest Rates 0.50%  2.00%                  1.50% 

12-11-01 Fed cuts Interest Rates 0.25%  1.75%                  1.25% 

11-06-02 Fed cuts Interest Rates 0.50%  1.25%                  0.75% 

January 2003 -- Change to "primary - secondary" discount rates.

06-25-03 Fed cuts Interest Rates 0.25%  2.00%                  1.00% 

09-18-07  Fed cuts Interest Rates 0.50%  5.25%                 4.75% 

10-31-07 Fed Cuts Interest Rates 0.25%  5.00%                 4.50% 

12-11-07 Fed Cuts Interest Rates 0.25%  4.75%                 4.25% 

01-22-08 Fed Cuts Interest Rates 0.75%  4.00%                 3.50% 

Discount Rate - This rate is charged on credit card sales of merchants by the credit card issuers (bank).

Fed Fund Rate - The interest rate that banks charge each other for the use of Fed funds.

Fed Rate Cuts - How They Impact Your Money

Short Term Impact
A rate cut is designed to stimulate the economy by making it cheaper to borrow money.  The Feds half point reduction in key short-term rates will probably immediately fuel a stock market rally which may very well hurt bond prices and push mortgage rates higher. 

Long Term Impact
The Fed's actions will likely spur consumer confidence and encourage spending, financing debt management programs as well as major product financing such as car loans and home loans. Still it takes 12 to 18 months before a rate cut impacts the economy for the better.  

In time the prime rate will drop to 4.25 percent. When this happens look for rates on some home equity loans and home equity lines of credit to drop. Rates on some variable-rate credit cards could drop as well. 

A rate cut at the right time can provide a boost of confidence as consumers take advantage of more attractive fixed financing rates and seek ways to save money over the long term by refinancing home loans, car and student loans as well as consolidating credit card debt. The money saved will inevitably lead to increased spending as the Fall holiday shopping season gets underway. 

If you have an adjustable rate loan or credit card anticipate a drop in rates in the weeks following a rate cut. Fixed rates are not affected. However if you opt for a 15 or 30 year fixed rate loan program you're still in for savings of up to thousands of dollars over a rate that's just .50% higher. Considering that today's rates are at  historic lows, a less risky approach to getting a good deal on a rate is to apply for rate quotes at lending marketplaces now.  Have lenders compete for your business and negotiate your best rate with such programs as adjustable rates mortgage to take advantage of future rate cuts..  Protect your current or future desired rate with rate re-lock-ins or long term rate locks that allow for rate locks of 30-60 days or more. 

Fed Rate Hikes

ARM's (adjustable-rate mortgages), that adjusts monthly or every six or 12 months, the rate will likely rise when the adjustment period arrives.

Federal Reserve's rate increase won't affect a fixed-rate mortgage. There is no increase in monthly mortgage payments when Fed rates are adjusted.

Home equity lines of credit, or HELOCs, might adjust upward in the next one to three payments, depending on how often the lender adjusts the rate. HELOC's feature variable rates that move up and down with the prime rate. The prime rate will rise immediately. 

The overnight rate influences the prime rate. Consumer debt tied into the prime rate are variable-rate credit cards, car loans and home equity lines of credit.

How To Shop Low Mortgage Rates

Home Mortgage Refinancing and Loans & Real Estate Links

Auto Loans -  HSBC Auto Finance is the trusted national company that can help with all of your auto financing needs. Apply Now. Mortgage Loans Home Refinancing - Home Equity - Home Purchase Loans - Low Rate Mortgage Refinancing FHA Loans - FHA Express-The quick way to get an FHA loan! Personal Loans - You're Approved for Guaranteed Unsecured Credit Cards and Personal Loans - Any Credit History Click Here Student Loans - Chase Private Student Loans- You could get up to $40,000 per year for college expenses like books, travel, or a laptop. Apply Today! Pay Day Loans - Free- No Fax Payday Loans