Comments on: Fed Cuts Short-Term Rate By 0.75 Points http://www.consumerismcommentary.com/2008/01/22/fed-cuts-short-term-rate-by-075-points/ A premiere personal finance blog, established 2003. Within, Flexo discusses his own experiences with money, and he and other authors comment on a wide range of personal finance topics. Sat, 21 Nov 2009 16:42:00 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: FIRE Finance http://www.consumerismcommentary.com/2008/01/22/fed-cuts-short-term-rate-by-075-points/#comment-133632 FIRE Finance Wed, 23 Jan 2008 18:13:42 +0000 http://www.consumerismcommentary.com/2008/01/22/fed-cuts-short-term-rate-by-075-points/#comment-133632 Most banks are slashing savings rates. WTDirect's Savings Account rate has fallen from 4.90% to 4.30% APY IngDirect has slashed their Orange Savings rate to 3.65% APY. The rates for the Electric Orange Checking Account have changed as well. $0-49,999.99 earns a 2.50% APY $50,000.00-$99,999.99 earns a 4.00% APY $100,000.00 or more earns a 4.25% APY Capital One's High Yield MMA is now poised at 3.50% APY after a series of cuts. Most banks are slashing savings rates.
WTDirect’s Savings Account rate has fallen from 4.90% to 4.30% APY

IngDirect has slashed their Orange Savings rate to 3.65% APY. The rates for the Electric Orange Checking Account have changed as well.
$0-49,999.99 earns a 2.50% APY
$50,000.00-$99,999.99 earns a 4.00% APY
$100,000.00 or more earns a 4.25% APY

Capital One’s High Yield MMA is now poised at 3.50% APY after a series of cuts.

]]> By: PT http://www.consumerismcommentary.com/2008/01/22/fed-cuts-short-term-rate-by-075-points/#comment-133617 PT Wed, 23 Jan 2008 16:21:44 +0000 http://www.consumerismcommentary.com/2008/01/22/fed-cuts-short-term-rate-by-075-points/#comment-133617 Flexo, You called it. ING DIRECT just lowered their rate to 3.65%. Hopefully that will be the extent of it this year. Re-thinking your savings strategy? Flexo,

You called it. ING DIRECT just lowered their rate to 3.65%. Hopefully that will be the extent of it this year.

Re-thinking your savings strategy?

]]> By: Bill http://www.consumerismcommentary.com/2008/01/22/fed-cuts-short-term-rate-by-075-points/#comment-133576 Bill Wed, 23 Jan 2008 05:09:57 +0000 http://www.consumerismcommentary.com/2008/01/22/fed-cuts-short-term-rate-by-075-points/#comment-133576 Agreed. This will induce some prepayments for those of us so inclined. But, remember that the real goal here is to make credit cheap so people (and companies) start buying again. I also wouldn't mind mortgage rates coming down so I can get out of my ARM before rate reset in 2-1/2 years. Agreed. This will induce some prepayments for those of us so inclined. But, remember that the real goal here is to make credit cheap so people (and companies) start buying again.

I also wouldn’t mind mortgage rates coming down so I can get out of my ARM before rate reset in 2-1/2 years.

]]> By: Cliff http://www.consumerismcommentary.com/2008/01/22/fed-cuts-short-term-rate-by-075-points/#comment-133575 Cliff Wed, 23 Jan 2008 04:53:32 +0000 http://www.consumerismcommentary.com/2008/01/22/fed-cuts-short-term-rate-by-075-points/#comment-133575 To be honest this move scares me a bit. This was an emergency rate cut, it signals something. Moreover, if we cut rates, will people start buying oil on margin? I think we need to eliminate oil speculation in the US, and then we can mess with rates. To be honest this move scares me a bit. This was an emergency rate cut, it signals something. Moreover, if we cut rates, will people start buying oil on margin? I think we need to eliminate oil speculation in the US, and then we can mess with rates.

]]> By: Steve http://www.consumerismcommentary.com/2008/01/22/fed-cuts-short-term-rate-by-075-points/#comment-133543 Steve Tue, 22 Jan 2008 18:45:40 +0000 http://www.consumerismcommentary.com/2008/01/22/fed-cuts-short-term-rate-by-075-points/#comment-133543 Interesting thoughts here. If savings are just sitting in a high-yield account for something longer term (not an emergency fund), inflation-protected bonds will offer a real yield (more than inflation) in exchange for taking on some credit risk. Since these rate cuts almost ensure future inflation you might get some gains in the underlying bonds also. They are especially useful in tax-deferred accounts. Interesting thoughts here. If savings are just sitting in a high-yield account for something longer term (not an emergency fund), inflation-protected bonds will offer a real yield (more than inflation) in exchange for taking on some credit risk. Since these rate cuts almost ensure future inflation you might get some gains in the underlying bonds also. They are especially useful in tax-deferred accounts.

]]> By: Josh http://www.consumerismcommentary.com/2008/01/22/fed-cuts-short-term-rate-by-075-points/#comment-133542 Josh Tue, 22 Jan 2008 18:20:25 +0000 http://www.consumerismcommentary.com/2008/01/22/fed-cuts-short-term-rate-by-075-points/#comment-133542 I am going to have to think long and hard about paying off my school loans now (~25k @ 3.95%) since EmigrantDirect.com will likely lower their rate to near that (and I have nearly enough to fully pay off the loan in savings). Decisions decisions. As an aside I do not think this is going to help the problem. How is the Fed going to pay for reducing their rate? Print more money, drive up inflation the dollar down. Meh. I am going to have to think long and hard about paying off my school loans now (~25k @ 3.95%) since EmigrantDirect.com will likely lower their rate to near that (and I have nearly enough to fully pay off the loan in savings). Decisions decisions.

As an aside I do not think this is going to help the problem. How is the Fed going to pay for reducing their rate? Print more money, drive up inflation the dollar down. Meh.

]]> By: sandycheeks http://www.consumerismcommentary.com/2008/01/22/fed-cuts-short-term-rate-by-075-points/#comment-133540 sandycheeks Tue, 22 Jan 2008 17:45:05 +0000 http://www.consumerismcommentary.com/2008/01/22/fed-cuts-short-term-rate-by-075-points/#comment-133540 But would pre-paying the mtg be after funding your 401/Roth or instead of? I know the debate about invest/prepay in a commn market but id this post saying that in this market things have changed? I feel like funding my Roth right now is like throwing money onto a sinking ship. But would pre-paying the mtg be after funding your 401/Roth or instead of? I know the debate about invest/prepay in a commn market but id this post saying that in this market things have changed? I feel like funding my Roth right now is like throwing money onto a sinking ship.

]]> By: Flexo http://www.consumerismcommentary.com/2008/01/22/fed-cuts-short-term-rate-by-075-points/#comment-133533 Flexo Tue, 22 Jan 2008 16:46:28 +0000 http://www.consumerismcommentary.com/2008/01/22/fed-cuts-short-term-rate-by-075-points/#comment-133533 Consumer debt is usually the first target, with higher interest rates in most cases. If you have none, home equity loans and mortgages should be targeted for advance payments as well. When you're not beating or matching inflation in a savings account, go for the guaranteed "return" of paying off debt. (It's not really a "return," it's just a reduction of expense.) Consumer debt is usually the first target, with higher interest rates in most cases. If you have none, home equity loans and mortgages should be targeted for advance payments as well. When you’re not beating or matching inflation in a savings account, go for the guaranteed “return” of paying off debt. (It’s not really a “return,” it’s just a reduction of expense.)

]]> By: sandycheeks http://www.consumerismcommentary.com/2008/01/22/fed-cuts-short-term-rate-by-075-points/#comment-133531 sandycheeks Tue, 22 Jan 2008 16:11:04 +0000 http://www.consumerismcommentary.com/2008/01/22/fed-cuts-short-term-rate-by-075-points/#comment-133531 By paying off debt, are you talking about mortgages or consumer debt? By paying off debt, are you talking about mortgages or consumer debt?

]]> By: Mars http://www.consumerismcommentary.com/2008/01/22/fed-cuts-short-term-rate-by-075-points/#comment-133521 Mars Tue, 22 Jan 2008 14:47:23 +0000 http://www.consumerismcommentary.com/2008/01/22/fed-cuts-short-term-rate-by-075-points/#comment-133521 Flexo, have a question for you. Looking for a nice present for my newly born niece. Budget is 200 - 250. Any suggestions? Low minimum mutual fund, treasury bond..etc? Flexo, have a question for you. Looking for a nice present for my newly born niece. Budget is 200 – 250. Any suggestions? Low minimum mutual fund, treasury bond..etc?

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