Rate cut to help loan seekers - WALB.com, Albany News, Weather, Sports

Rate cut to help loan seekers

September 19, 2007

Albany-- The federal reserve's decision to cut rates a half a percentage point this week is seen as a shot in the arm for the US economy.  Local lenders say it will have immediate effects on some shorter term loans. Others may have to wait for a trickle down effect.

"directly it usually effects your short term lending like cars and credit cards, but eventually it does have a trickle down effect on us, just like this morning of an eighth of a percentage point trickle down and probably they will come down more as the stock market goes up and the other lending picks up a little bit also" said Northside Mortgage owner Stacey Walker.
 
 Stock prices surged as the decision gave investors hope the housing and credit turmoil wouldn't drag the economy down. The Dow Jones industrial average closed up 335 points Tuesday, the Dow's best daily percentage gain since 2003.  It was up another 76-points today, but is the surge just a short term event?

"I think it is more short term than long term because one thing that the Federal Reserve is trying to do is one try to stimulate the economy when necessary and the other is to control inflation and if we see an inflationary trend in the economy they could raise that rate again in six months, or a year from now. So I think it is more of a short term situation than a long term" said Financial Planner Tommy Padgett.

Many economists say more rate cuts may be on the horizon if the housing market remains sluggish.

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