The Fed Strikes Interest Rates Again

It was only last year that the nation patiently waited for the Federal Reserve to step in and cut interest rates so that those that were plagued with high interest rates could have a little more breathing room to pay their bills. As people waited for the Federal Reserve to step in and help those that were losing all they had as the sub prime loan bust rocked the nation, the Federal Reserve bided their time until September 18, 2007 when they finally made an interest rate cut of a quarter of a percentage on interest rates.

The Federal Reserve once stated that they were weary to step in and make any cuts to interest rates, but with a second interest rate cut in one week it appears that the wariness has faded and the fear of recession has set in. On January 22, 2008 the Federal Reserve made three fourths of a percentage point cut that was followed by yet another half point cut on Wednesday, January 30, 2008.

As stated before, the Federal Reserve made no interest rate cuts in 2007 which was during the time that sub prime lending showed its ugly head and the credit crisis began. Since the September 18, 2007 interest rate cut the Federal Reserve has had no choice but to make four additional interest rate cuts leaving at the present time the funds rate at 3 percent. The renewed interest in the percentage rate at which interest rates fall are due mainly to the severe credit crisis the nation is facing as many still struggle to make ends meet.

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