[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]
Today we came across a couple of interesting bits of information aka news concerned with banking, rate cuts and the market. Capital One's APY for their High Yield Money Market Account (HMMA) is continuing to drop at the start of 2008. In case you need to move your monies, here is our most recent analysis of savings accounts offering APYs of 5.10% and more!
If the credit market leads to further deterioration of the housing sector i.e. real estate, the overall US economy might be affected. After its latest meeting today, the Federal Reserves hinted that in such a case there might be more interest rate cuts. The central bank lowered its key federal funds rate by a quarter of a percentage point on Dec. 11 to 4.25 percent. The federal funds rate is an overnight bank lending rate that affects how much consumers pay for various types of debt, including credit cards, home equity lines of credit and auto loans. The chances of a rate cut after the Fed's next meeting, a two-day session that concludes on Jan. 30 are almost a certainity. The question is simply how big of a cut it will be.
"According to futures listed on the Chicago Board of Trade, investors are pricing in a 100 percent chance that the Fed will lower the federal funds rate by another quarter-point to 4 percent and a 26 percent chance that the central bank will lower rates a half-point to 3.75 percent."Meanwhile Wall Street, kicked off 2008 with new worries about a recession as well as rising inflation. Looks like the news of an anticipated rate cut by the Feds did nothing to stabilize Wall Street and its fears!!
Image Source(s): iStockPhoto