Money For Nothing, Loans for Free
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James Joyner | Tuesday, December 16, 2008 |
The Fed cut their lending rate to zero.
A surprised Wall Street bolted higher Tuesday after the Federal Reserve’s historic decision to further slash interest rates and provide broad support to revive the troubled economy. The Dow Jones industrials surged 360 points, or 4.2 percent, and broader indexes jumped more than 5 percent after the central bank said it will use “all available tools” to jump-start the economy. It also set its target for the rate at which banks lend to each other to a range of zero to 0.25 percent, the lowest level on record.
This record may be tied but I predict it’ll never be broken.
About the Author: James Joyner is the publisher of Outside the Beltway and the managing editor of the Atlantic Council. He's a former Army officer, Desert Storm vet, and college professor with a PhD in political science from The University of Alabama. He lives just outside the Beltway in Alexandria, Virginia with his wife and infant daughter.
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This record may be tied but I predict it’ll never be broken.
See, it's that kind of hard to get insight that keeps me coming back to OTB....that and the caption contests... :)
Here's hoping it works better for us than for the Japanese.
Damn! I was hoping for a negative rate so I could get a check in the mail.
So how is this going to stimulate demand to levels which will kickstart the economy and get more money flowing through it? Company after company is saying that there is no immediate recovery in sight. What do central banks have in their bag to use when a bigger jolt is needed? The only alternative seems to be big tax cuts which in turn will drive up budget deficits.
VK, I think the economists have known that we were heading here, to the ZIRP, for about six months now. That's the reason they've been arguing about the effectiveness of the New Deal.
The fact that they don't agree ... it doesn't send us voters and citizens a real clear signal.
This record may be tied but I predict it’ll never be broken.
Now they're talking about printing more money....
Time to buy a wheelbarrow.
Time for America to refinance again!!
What the Federal Reserve is doing could drive mortgage rates down to the 4.5% range.
This could be worth several hundred dollars a month in savings to the typical homeowner, depending on the size of the loan. In coastal states with high home values this could mean significant savings for those folks who can refinance. For buyers it makes home ownership more attractive.
I haven't been flooded with offers to refi with no out of pocket costs as I was previously whenever rates went down. Perhaps this time I will have to search out a lender instead of waiting for one to come to me.
