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The Cost of a Rate Cut

Since September, the Fed has slashed its key interest rate from 5.25 percent to 2.25 percent. Each reduction in the federal funds rate makes the cost of borrowing cheaper but also stokes inflation, weakening the U.S. dollar and translating into higher commodity prices for U.S. consumers.

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Behind Cheaper Credit, Inflation Fears Loom
Article | The Federal Reserve Board's rate cut yesterday increased the chances that months of Fed moves could start to trickle down to homeowners in time to ease the pain when adjustable-rate mortgages reset this year. And people who borrow money to pay tuition, buy cars or cover unpaid credit card bills m...

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