Thousands of immigrants looking for the American dream of owning a home flock to United States each year. Recently, the possibilities of owning of home in America for everybody are becoming slimmer as each day goes on. Prices on gas, electricity, food, and services continue on the rise. The average salary, however, only increases slightly. This has a caused a crisis in America’s economy. Many people are being evicted from their homes and thousands of foreclosures are happening daily. In all of this mess, both consumers and the banks are losing. The United States Federal Reserve has recently stepped in the minimize the loss and hopefully reverse what’s currently going on.
According to the Associated Press, the past two weeks has seen the Federal Reserve cut it’s interest rates twice to banks hoping that both America’s banks and America’s consumers can survive through this glitch in the United State’s current economy. The first cut by the Federal Reserve was the biggest rate cut in over 20 years, taking .75% out of their lending rate, reported CNN. The second cut, took the interest rate down an additional .50%. It is the Federal Reserve’s hopes that by decreasing their lending rates the mortgage meltdown will come to a halt. This remains to be seen, however. The Federal Reserve is willing to continue cutting their interest rate if their current cuts are not effective. For more information of the respective topic you can click https://www.accreditloan.com/ her.
The second rate cut, made on January 30 of 2008, was necessary for several reasons. One reason the Federal Reserve’s cut was necessary was to assure people worldwide that the United States economy will persevere. If people began to predict a total crash in the US economy, many countries dependent on the US would find their economy slipping. Another reason the rate cut was necessary was because it temporarily secured the stock market. If the previous cut had not been made, it is probable that the stock market would have been in a dangerous zone by now. Today’s cut gives the stock market some extra breathing room for the upcoming weeks. This gives investors of US businesses’ no reason to sell their stocks, which would cause further chaos in the economy. The rate cut was also necessary as it gives individuals that currently don’t have enough money to pay their rent a chance to bargain with their banks asking for lower interest rates, which the banks are now more pressured to give.
Personally, the rate cuts that have happened today give me a sense of hope. A sense of hope that gives me enough courage to call up the banks and ask them to lower my interest. Although every bank may not be willing to negotiate with me, it is likely some will. This will allow me to lower my monthly payments and have extra cash on hand. In conclusion, the rate cuts that have been made today are making the American dream more of a reality for many, yet will probably not be enough to salvage the current economy.