As expected, the Federal Reserve wrapped up its November meetings with the announcement of another interest rate cut. After cutting rates by 50 basis points in September, this time the Fed and Chairman Jerome Powell opted to go with a cut of 25 basis points.
"I'm increasingly confident that this has nothing to do with either inflation or the labor market," said Heritage Foundation economist EJ Antoni.
"It's about saving the banks. A lot of financial institutions are on the wrong side of the interest rate trade, and that's causing tremendous losses within the financial system," Antoni said.
He also thinks that President-Elect Donald Trump will allow Chairman Jerome Powell to finish his term, but not nominate him for another one.
Bankrate Chief Financial Analyst Greg McBride, shared his thoughts with KTRH.
“The impact of today’s rate cut is dampened by the surge in Treasury yields seen since the September FOMC meeting. The big increase in mortgage rates, from 6.2% to 7% in the past 7 weeks, hits harder than a quarter-percentage point drop in a credit card rate.”
And so the reality is, this is going to be a slow recovery from arguably the worst inflation of our lifetime, and maybe even the history of the nation.
“Interest rates took the elevator going up in 2022 and 2023 but they’re going to take the stairs coming down in 2024 and 2025. Borrowers won’t see immediate or substantive relief from falling rates but should stay aggressive about paying down high-cost debt and look for zero-percent or other low-rate opportunities to accelerate debt repayment" added McBride.
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