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.

This Story 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... Fed Slashes Key Interest Rate, and Stocks Soar Democrats Draft Plans for Distressed Homeowners GLOSSARY: 'Moral Hazard': Why Risk Is Good World's No. 2 Economy Has Vacancy at Top Financial Stocks Lead Wall Street Turnabout What if The Fed Fails? The Cost of a Rate Cut		TOOLBOX E-Mail This Save/Share + Digg Facebook Reddit Twitter myspace del.icio.us NewsTrust Stumble It! COMMENT 0 Comments Your browser's settings may be preventing you from commenting on and viewing comments about this item. See instructions for fixing the problem. Discussion Policy CLOSE Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post. Who's Blogging » Links to this graphic
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